M. Sundarammal vs Govindarajulu Reddi and Another

Venkataraman, J.—This second appeal has been filed by the Plaintiff in a suit Original Suit No. 195 of 1959, on the file of the District

Munsif of Poonamallee, for declaration of the Plaintiff''s title to the suit properties and for recovery of possession thereof, after redeeming a

usufructuary mortgage, dated 2nd November 1943, executed by the previous owner, Appavu Pillai, in favour of the second Defendant, Munusami

Reddi, for Rs. 1,000 (exhibit A-2). The Plaintiff claims to have purchased the properties from Appavu Pillai under exhibit A-1, dated 19th July

1951, for Rs. 2,000. The first Defendant, who happens to be the son of the second Defendant, also claims to have purchased the same properties

from Appavu Pillai under exhibit B-10, dated 14th August 1951 for Rs. 4,000. He also claims to have redeemed the usufructuary mortgage in

favour of his father, the second Defendant, and obtained possession on 14th August 1951. His case is that the sale, exhibit B-10, though, dated

14th August 1951, was in pursuance of an agreement of sale, dated 17th July 1951, between him and Appavu Pillai, and that the Plaintiff was

aware of that agreement, and was not at all a bona fide purchaser for value. In fact, his case is that the sale deed, exhibit A-1, dated 19th July

1951, hi favour of the Plaintiff, was sham and nominal and was merely a, device resorted to by Appavu Pillai in collusion with the Plaintiff to

blackmail the first Defendant and extort a higher price of Rs. 4,000 for the conveyance of the properties as against the original price of Rs. 2,000

fixed in the agreement of 17th July 1951. The alternative plea of the first Defendant is that, if the sale in favour of the Plaintiff was not sham and

nominal, it was atleast fraudulent, and since it was with notice of the agreement of 17th July 1951, it could not prevail against the sale in favour of

the first Defendant, by virtue of the principles contained in Section 91 of the Trusts Act and Section 27 (b) of the Specific Relief Act. For the

purpose of the second appeal it is unnecessary to state the antecedent history.

The learned District Munsif, who tried the suit, rejected the defence and held that the agreement of 17th July 1951, set up by the first Defendant

was not proved, and that the sale in favour of the Plaintiff was true and valid and was neither sham and nominal nor fraudulent. He decreed the suit.

On appeal however, the learned District Judge reversed the judgment of the learned District Munsif, holding that there was an agreement of 17th

July 1951 between Appavu Pillai and the first Defendant, and that the sale in favour of the Plaintiff was sham and nominal and was brought about

collusively between the Plaintiff and Appavu Pillai, in order to extort a higher price from the first Defendant than the price of Rs. 2,000 agreed

upon on 17th July 1951. It is sufficient to mention at this stage two of the principal reasons given by the learned District Judge in support of his

finding. The first is afforded by exhibit B-9, a receipt passed by Doraisami Reddi (P.W. 3), the son-in-law of the Plaintiff, for Rs. 900, which he

(Doraisami) received from the first Defendant in full satisfaction of the decree in Original Suit No. 266 of 1947 which he had obtained against

Appavu Pillai. Exhibit B-9 is, dated 19th July 1951 and has also been attested by Appavu Pillai, who is now dead, and was written and attested

by one Venkatasubba Reddi, who is also dead. P.W. 2 admitted having signed exhibit B-9, but pleaded that the first Defendant did not pay Rs.

900 to Appavu Pillai, and obtained P.W. 3''s signature promising to get the payment, but did not keep up his promise. The learned District Judge

rejected this evidence of P.W. 3 and the supporting evidence of P.W. 4, the attestor to exhibit B-9, and accepted the evidence of the first

Defendant that he paid a sum of Rs. 900 precisely because of the agreement of 17th July 1951 by which Appavu Pillai had agreed to sell the suit

properties to him for Ra. 2,000. The learned District Judge pointed out that the payment by the first Defendant on the crucial date, 19th July 1951,

was not explicable otherwise than on the basis of the first Defendant''s case. The learned District Judge accepted the case of the first Defendant

that, after making the first Defendant pay the sum of Rs. 900, Appavu Pillai took away the sale deed, which was written on stamp papers, to

Madras, and colluded with the Plaintiff and brought about the sale deed exhibit A-1 and had it registered on the next day, 20th July 1951.

The second important circumstance pointed out by the learned District Judge was the conduct of the Plaintiff. Not merely did he take no steps

to redeem the mortgage in favour of the second Defendant quickly, but the suit itself was filed only eight years latter, in 1959, after the death of

Appavu Pillai in 1956. The learned District Judge pointed out that this would not be the conduct of a person, who had really paid Rs. 2,000 under

exhibit A-1.

As a result of his findings, the learned District Judge dismissed the suit. Hence this further appeal.

Sri Ramanujam, the learned Counsel for the Appellant, canvassed the finding of the learned District Judge on the facts. But, in second appeal, the

findings of the learned District Judge are binding, and there is no reason for interference in second appeal. Indeed, I have no doubt that the findings

of the learned District Judge are correct, and are the only findings which can be arrived at reasonably.

The learned Counsel for the Appellant urged that the evidence would, at the most warrant only an inference that the Plaintiff, when he took the

sale deed, exhibit A-1, dated 19th July 1951, was aware of the agreement of 17th July 1951 between Appavu Pillai and the first Defendant, and

that the evidence would not warrant the finding that the sale deed in favour of the Plaintiff was sham and nominal. In second appeal we cannot go

into the quantum of evidence necessary to reach a finding, and the finding of fact can be interfered with only if there is no evidence whatever is

support of the finding. That is not the case here. There was sufficient legal evidence on which the learned District Judge could properly give the

finding that the sale deed was sham and nominal. Once that finding is reached, it is clear that the Plaintiff has no legal legs to stand on, because the

sale deed in her favour, on which alone she relies for the redemption of the mortgage, has no existence in the eye of the law.

But, even assuming for the sake of argument, and argument only, that the evidence is not sufficient to warrant a finding that the sale exhibit A-1,

is sham and nominal, there can be no doubt that the evidence is more than sufficient to warrant a finding that the sale in favour of the Plaintiff was

fraudulent and intended to defeat the rights of the first Defendant, and was brought about with knowledge of the agreement of 17th July 1951. In

my opinion, that finding is sufficient to enable the first Defendant to resist the claim of the Plaintiff on the principles of Section 91 of the Trusts Act,

Section 40 second clause of the Transfer of Property Act and Section 27 (6) of the Specific Relief Act, 1887. Section 91 of the Trusts Act says:

Where a person acquires property with notice that another person has entered into an existing contract affecting that property, of which specific

performance could be enforced, the former must hold the property for the benefit of the latter to the extent necessary to give effect to the contract.

Section 40 second clause of the Transfer of Property Act is similar and it says;

Where a third person is entitled to the benefit of an obligation arising out of contract, and annexed to the ownership of immovable property, but not

amounting to an interest therein or easement thereon, such right or obligation may be enforced against a transferee with notice thereof or a

gratuitous transferee of the property affected thereby, but not against a transferee for consideration and without notice of the right or obligation, nor

against such property in his hands.

Section 27 of the Specific Relief Act, 1887 (which was in force when the suit was brought) says;

Except as otherwise provided by this Chapter, specific performance of a contract may be enforced against--

(a) either party thereto;

(b) any other person claiming under him by a title arising subsequently to the contract, except a transferee for value who has paid his money in

good faith and without notice of the original contract....

u/s 27 (b) of the Specific Relief Act as applied to this case, it will follow that before 14th August 1951, it would have been open to the first

Defendant to obtain specific performance of the contract of 17th July 1951, against Appavu Pillai and also the Plaintiff, because the latter was not

a transferee in good faith and had notice of the agreement of 17th'' July 1951. But actually the first Defendant obtained the sale deed on 14th

August 1951, from Appavu Pillai and got possession from the mortgagee the second Defendant and he is entitled to resist the suit of the Plaintiff

because of the provisions of Section 91 of the Trusts Act. Under that provision the Plaintiff, who acquired the properties under exhibit A-1, with

notice of the prior contract between the first Defendant and Appavu Pillai of which specific performance could have been enforced, must hold that

property for the benefit of the first Defendant to the extent necessary to give effect to that contract. In other words, he must hold the property for

the benefit of the first Defendant entirely because the contract was one for the sale of the property. This means that the first Defendant could plead

even by way of defence that the title acquired by the Plaintiff under exhibit A-1, is voidable against the first Defendant and that, therefore, the

Plaintiff cannot recover possession from the first Defendant.

It has, however, been urged by Sri G. Ramanujam, the learned Counsel for the Appellant, that the above provisions only enact the substantive

law, that procedurally it was necessary for the first Defendant to have filed a suit against the Plaintiff to set aside the sale of 19th July 1951, exhibit

A-1, that so long as he did not do so, that sale, being only vioidable, would hold good and, therefore, the position would be that after the sale of

I9th July 1951, Appavu Pillai had no title to convey to the first Defendant on 14th August 1951 under exhibit �-10. The further submission of the

learned Counsel is that any such suit of the first Defendant to avoid exhibit A-1, would hare been time-barred in 1959, the date of the Plaintiff''s

suit under Article 113 of the Limitation Act of 1908. The learned Counsel has cited some decisions in support of his contention. I shall deal with

those decision later. It is enough to point out at this stage that these submissions ignore the fact that the first Defendant has after obtaining the sale

deed exhibit B-10 from Appavu Pillai, obtained possession and is only trying to put forward the voidable nature of the Plaintiff''s sale deed exhibit

A-1 in defence to the action seeking to eject him. Possession as has been repeatedly pointed out, is nine points of law, and it is open to a person in

the position of the first Defendant, for maintaining his possession to plead that the Plaintiff does not have, as against him, a good title for evicting

him. Since the first Defendant is already in possession, he is not obliged to file a suit himself to set aside the sale deed in favour of the Plaintiff. He

could wait till the Plaintiff sought to evict him, and then set up the voidable nature of the Plaintiff''s sale deed, in defence, and where the first

Defendant is merely pleading by way of defence the voidable nature of the Plaintiff''s sale deed, no question of limitation will arise. In other words,

even if a suit, which the first Defendant might have had to file against the Plaintiff, if the first Defendant had not obtained possession, might be time-

barred in 1959, that would not prevent the first Defendant from setting up the voidable nature of the Plaintiff''s'' sale deed by way of defence.

Section 28 of the Limitation Act, 1908 which says,

At the determination of theperiod hereby limited to any person for instituting a suit for possession of any property, his right to such property shall

be extinguished.

applies only to a Plaintiff instituting a suit for possession and does not bar defence of the voidable nature of the deed even after theperiod of

limitation.

The point is really concluded by the decision of the Bench of this Court in Thiruvenkatachariar v. Seshadri Iyengar (1916) 30 M.L.J. 550. The

facts in that case are practically identical with the facts of the present case. In that case, the facts as stated by the learned Chief Justice are these;

...the Plaintiff sues to recover property in possession of Defendants 4 and 5. Defendants 1 to 3 first contracted on the 12th July 1911 to sell the

property to the Defendants 4 and 5, then on the 11th September 1911 sold it by registered sale deed to the Plaintiff, who had notice of the

previous contract and subsequently on the 17th October 1911 executed a registered sale deed in favour of Defendants 4 and 5 and put them In

possession, after which the Plaintiff instituted the present suit Original Suit No. 23 of 1912 for possession.

The lower appellate Court had held that since Defendants 4 and 5 had not obtained a registered sale deed from the Plaintiff they were not

entitled to resist the suit for possession and relied on a decision of the Pull Bench in Kurri Veerareddi v. Kurri Bapireddi ILR (1906) Mad. 336.

In that Full Bench case, the facts were these. The lands in dispute belonged to the Plaintiff. Sometime before the suit, the Plaintiff agreed to sell

the lands to the tenth Defendant, but according to the Plaintiff no possession was given to the tenth Defendant and the negotiations fell through. The

tenth Defendant, alleging that he had been put in possession, sold the lands by registered deed to Defendants 1, 2 and 3, who obtained a decree

for delivery of possession against the Plaintiff in Suit No. 943 of 1898. The Plaintiff thereupon instituted the suit to set aside the decree and to

obtain redelivery if need be. The trial Court found that the tenth Defendant had paid the price and had been put in possession, and dismissed the

Plaintiff''s suit. The lower appellate Court modified the decree by giving possession to the Plaintiff on his repaying the money received by him.

Defendants 1 to 3 and 10 preferred the second appeal, which was referred to the Full Bench. The Bench before whom it came pointed out that on

the date of the suit Original Suit No. 640 of 1899 the claim for specific performance against the Plaintiff by the Defendants 1 to 3 and 10 was

prima facie not barred at the institution of the suit nor at the time the Defendants filed their written statements, nor at the date of the decree of the

Court of first instance. In view of the conflict of decisions, the following question was referred to the Full- Bench;

Whether, assuming that the Defendants'' right to obtain specific performance by way of execution of a sale deed by the Plaintiff was not at the date

of the suit, barred by limitation, the Plaintiff is entitled to maintain this suit for the recovery of possession'' of the land agreed to be sold.

The Full Bench pointed out that u/s 54 of the Transfer of Property Act the sale of property of the value of Rs. 100 and upwards could be only

by a registered instrument in writing and that the contract for the sale did not even create any interest in the property, and, therefore, the Plaintiff

was entitled to decree.

The learned Judges who decided the case in Malaimel Thiruvenkatachariar and Another Vs. Pari Seshadri Iyengar and Others, reversed the

decision of the lower appellate. Court and distinguished the Full Bench decision in Kurri Veerareddi v. Kurri Bapireddi ILR (1906) Mad. 336.

The learned Judges relied on Section 91 of the Trusts Act and pointed out that the Plaintiff was bound to hold the property for the benefit of

Defendants 4 and 5 to the extent necessary to give effect to the prior contract in their favour, dated 12th July 1911, and that Defendants 4 and 5

were entitled to resist the Plaintiff''s suit for possession in view of the obligation cast on the Plaintiff u/s 91 of the Trusts Act. The learned Judges

distinguished Kurri Veerareddi v. Kurri Bapireddi ILR (1906) Mad. 336 on the grounds that actually in that case no sale deed had been obtained

from the Plaintiff as required by Section 54 of the Transfer of Property Act and there was no provision like Section 91 of the Trust Act applicable

to the case of an owner himself, making him a trustee for the vendee in a case where he has received the purchase money. The learned Judges

followed another Full Bench decision in Lakshmi Doss v. Roop Laul ILR (1907) Mad. 169 and relied on the observations in another Bench

decision in Raja Rajeswara Dorai v. Arunachelan Chettiar ILR (1913) Mad. 321.

In Lakshmi Doss v. Roop Laul ILR (1907) Mad. 169 the Plaintiff claimed payment of certain annuities which, they alleged were due to them

under the provisions of a deed made between one Eswara Doss and the Defendant in 1887. The Defendant had been adopted by Eswara Doss in

1873. Eswara Doss exercised considerable influence on the adopted son and shortly after he attained his majority, the deed of 1887 was brought

about by which Eswara Doss made the Defendant surrender practically the bulk of the properties for certain trusts the beneficiaries of which

included the Plaintiff. The Defendant pleaded that the deed of 1887 was not explained to him at all and, that it was brought about by undue

influence. That defence was upheld. On the date of the suit of the Plaintiff a suit by the Defendant to set aside the deed of 1887 on the ground of

undue influence would have been time-barred under Article 91 of the then Limitation Act. But it was held that could not prevent the Defendant

from pleading by way of defence that the deed was vitiated by undue influence and would not be enforced against him. At page 178, the Full

Bench observed:

We do not think it follows that because a party''s remedy as Plaintiff to have an instrument avoided is time-barred, his right to say, by way of

equitable defence if sued, that the instrument'' ought not to be enforced, is equally time-barred. The delay is, of course, an equitable reply to the

equitable defence, but we do not think it can amount to a statutory bar.

In Raja Rajeswara Dorai v. Arunachdlan Chetliar ILR (1913) Mad. 321 the Plaintiff (Rajah of Ramnad) prayed for a decree that the two

leases executed by his deceased father in 1889 and 1893 were not binding upon him and for possession of the property from the Defendant. The

Plaintiff alleged that the leases were obtained by the exercise of undue influence. The suit was instituted in 1904. It was held that the suit was time-

barred under Article 91 of the then Limitation Act, because it was instituted more than three years after the facts became known to the Plaintiff.

The contention which was raised by the Plaintiff to overcome the plea of limitation was that because the deed was voidable it was enough for him

to have avoided it as he claimed to have done even outside the Court, and that it was not necessary for him to file a suit for that purpose within the

time. This contention was negatived and it was pointed out that the deed had necessarily to be set aside through the medium of the Court, and that

in such a case he would have to file a suit within theperiod allowed by the law of limitation. It was in that connection Sadasiva Aiyar J. at page 336

and 337 of Raja Rajeswara Dorai v. Arunachellan Chettiar ILR (1913) Mad. 321 distinguished the English cases where there was no such

question of limitation governing the power of Court to grant a judicial rescission. The learned Judge pointed out that in those cases repudiation for

good cause by the party and judicial rescission for the same good cause by the Court could be talked of as if standing on the same footing, but not

in India where the deed had to be set aside and a suit for that purpose would have to be filed within theperiod prescribed by the law of limitation.

The learned Judge then proceeded to point out that even in India the law of limitation would not stand in the way of a Defendant pleading the

voidable nature of a deed. He observed:

Again, even where the law of limitation affects the power of the Court to grant or declare a judicial rescission in favour of a Plaintiff, the power of

the Court to find in favour of a Defendant that a proper rescission has taken place by the repudiation of the Defendant for good cause and the

power of the Court on such a ground to non-suit the Plaintiff, seems to be much larger, as has been held in the Full Bench case of Lakshmi Doss v.

Roop Laul ILR (1907) Mad. 169. The Defendant, though his right to bring a suit for rescission of a contract or a lease may be barred, might be

permitted to defend his possession of properties by showing that the contract or lease so voidable at his instance has been repudiated by him.

Section 28 of the Limitation Act is as follows: ""At the determination of theperiod hereby limited to any person for instituting a suit for possession of

any property, his right to such property shall be extinguished."" This shows that it is only where a person is under a necessity to institute a suit for

possession of the property to which he lays a claim (and where the time for instituting such suit has lapsed), that his title to the property is

extinguished. But if he is himself in possession and it is only his right to sue as Plaintiff to set aside or declare invalid the deed or title set up by

another man that is VENKAT barred, he could defend his possession by pleading, as Defendant, the voidability of the deed or title set up by the

Plaintiff who seeks possession. I am not sure that even the Defendant, unless he has perfected his title by adverse possession, should not be

deprived ""of his possession if there is a registered deed (corresponding to a deed under seal in English Law), which, prima facie, has transferred

title to the Plaintiff, though it was voidable at the instance of the Defendant, if the Defendant had not brought the suit within the prescribedperiod to

have that deed set aside. But the case of Lakshmi Doss v. Roop Lal ILR (1907) Mad. 169 has decided otherwise, though the learned Judges did

admit the difficult nature of the question, and I do not wish to unsettle the law as fixed by that decision.

Now, it is true that in Malaimel Thiruvenkatachariar and Another Vs. Pari Seshadri Iyengar and Others, , the Plaintiff''s suit for possession was

brought in 1912 and on that date the time for institution of a suit by Defendants 4 and 5 to set aside the sale deed in favour of the Plaintiff had not

expired, whereas in the case before us the time for a suit by the first Defendant to set aside the sale deed in favour of the Plaintiff had expired

before 1959, the date of the present suit. But the reasoning in Lakshmi Doss v. Roop Lal ILR (1907) Mad. 169 and the observations in Raja

Rajeswara Dorai v. Arunachellan Chettiar ILR (1918) Mad. 321, which were followed by the learned Judges in Malaimel Thiruvenkatachariar and

Another Vs. Pari Seshadri Iyengar and Others, clearly show (i) that it is not necessary for a person like the first Defendant, who has obtained the

sale deed from the original owner Appavu and has also obtained possession, to sue the Plaintiff for setting aside the sale deed exhibit A-1 in favour

of the Plaintiff, and (ii) that consequently the fact that if the first Defendant had to file such a suit, it would be time-barred, cannot stand in the way

of the first Defendant raising the plea of the invalidity of exhibit A-1 against him by way of defence. It may be added that if necessary there can be

no objection to the sale deed exhibit A-1 being set aside in this suit itself at the instance of the first Defendant. Support for this position is derived

from illustration (a) to Section 19-A of the Contract Act:

(a) A''s son has forged B''s name to a promissory note. B, under threat of prosecuting A''s son, obtains a bond from A for the amount of the

forged note. If B sues on this bond, the Court may set the bond aside.

(b) A, a money-lender, advances Rs. 100 to B an agriculturist, and, by undue influence induces B to execute a bond for Rs. 200 with interest at 6

per cent per month. The Court may set the bond aside, ordering B to repay the Rs. 100 with such interest as may seem just.

Illustration (a) as contrasted with illustration (b) shows that the bond may be set aside even at the instance of the Defendant in a suit brought by

the Plaintiff on the bond and that the Defendant need not file a suit himself to set aside the bond on the ground of coercion or undue influence. On

the same parity of reasoning it might be said that even in the present case the sale deed exhibit A-1 in favour of the Plaintiff might be set aside in

this suit at the instance of the first Defendant. Incidentally I may observe that Sadasiva Aiyar J., has also referred to illustrations (a) and (6) to

Section 19-A of the Contract Act in Raja Rajeswara Dorai v. Arunachellan Chettiar ILR (1913) Mad. 321 for the purpose of refuting the

contention of the Plaintiff, Raja of Ramnad, in that case that it was unnecessary to resort to Court to have the sale set aside. Sadasiva Aiyar J.,

quotes the illustrations and other provisions of the statute to show that the Legislature contemplated that even where the defence of undue influence

is set up, the deed has to be set aside. It is unnecessary to add that this does not in any way conflict with the earlier observations of Sadasiva Aiyar

J., that the defence of undue influence could be raised even beyond theperiod of limitation. In fact, there is a decision of the Privy Council showing

that the Limitation Act does not apply to a defence (Sri Krishna Lal v. Mussamat Kashmiro (1916) 31 M.L.J. 362 (P.C.)).

In that case the Plaintiff brought the suit to recover l/4th of the mortgage-money alleged to be due to him by virtue of a certain arrangement,

which was relied on as a family settlement. The defence was one of undue influence. A suit to avoid the arrangement on the ground of undue

influence would have been time-barred on the date of the defence and on that account it was urged that the defence could not be set up. Their

Lordships repelled that contention observing: (at page 374)

It has been contended here that limitation is bar to Mussamat Kashmiro''s defence. The Indian Limitation Act would not apply to her defence.

My attention has not been drawn to any decision overruling the decision in Malaimel Thiruvenkatachariar and Another Vs. Pari Seshadri

Iyengar and Others, . Apart from the fact that it is binding on me, I respectfully adopt that decision as correct. In my opinion, its correctness has

not been impaired by any of the decisions cited by the learned Counsel for the Appellant I shall discuss them presently. Before doing so, I may

perhaps refer incidentally to a decision of the Supreme Court just by way of analogy to show that a person like the first Defendant will be entitled

to rely by way of defence on the voidable nature of the sale deed in favour of the Plaintiff exhibit A-1. The decision is Abdul Shukoor Saheb v.

Papa Rao (1964) 1 M.L.J. 49 (S.C.). It arose out of a claim suit (Original Suit No. 145 of 1951) filed under Order XXI, Rule 63 of the Code of

Civil Procedure. The first Defendant Arji Appa Rao had attached certain property in execution of a money decree which he had obtained (in

Original Suit No. 46 of 1950) against the second Defendant''s firm and its partners Defendants 3 and 4. The Plaintiff intervened with a claim

petition alleging that the property had been sold to him earlier by Defendants 3 and 4. The claim petition was dismissed and thereupon the claim

suit was filed. The contesting Defendant, the first Defendant, pleaded in the alternative that the sale in favour of the Plaintiff was either sham and

nominal transaction or in fraud of creditors of whom the first Defendant was one. The suit was decreed by the trial Court, but dismissed by the

High Court on appeal. The Plaintiff preferred the further appeal to the Supreme Court. It was found as a fact that the sale in favour of the Plaintiff

was intended to avoid the creditors of Defendants 3 and 4 like the first Defendant and was voidable u/s 53 (1) of the Transfer of Property Act.

The contention which was raised on behalf of the Plaintiff was that such a defence could not be validly raised by the first Defendant. This was put

on the ground that the suit under Order XXI Rule 63, CPC arose only on the dismissal of the claim petition under Order XXI Rule 56 the scope of

which was confined to the question whether the Plaintiff was in possession on his own accord and not on account of the judgment-debtors and that

it was foreign to the scope of a suit under Order XXI Rule 63 to go into the question of the voidable nature of the sale deed u/s 53 (1). Transfer of

Property Act and that such a question could be raised only by the creditor filing a suit u/s 53 (1) of the Transfer of Property Act and such a suit,

according to the amendment effected in 1929 to that section, could only be on behalf of or for the benefit of all the creditors and, therefore, such a

plea could not be put forth individually by a single creditor by way of defence in a claim suit. This contention was repelled by Their Lordships who

approved of the Full Bench decision of five Judges of Madras in Ramaswami Chettiar v. Mallappa Reddiar ILR (1920) Mad. 760 and pointed out

that the amendment made in 1928 in Section 53(1) of the Transfer of Property Act did not alter the position. Their Lordships observed that a

creditor like the first Defendant could plead by way of defence alternatively that the sale in favour of the Plaintiff was sham or was fraudulent and

that his intention to avoid the deed could be evidenced by his persisting in the attachment and resisting the claim petition. As regards the effect of

the amendment they observed: (at page 60)

From a provision as to how a Plaintiff, if he filed a suit, should frame it, we can see no logical process by which it could be held that a Defendant

cannot impugn the validity of the sale which is voidable at his instance.

It seems to me that this principle is capable of application to the case before us and enables us to hold that the first Defendant need not file a

suit to set aside the sale in favour of the Plaintiff as the first Defendant has already obtained a sale deed from Appavu Pillai and is also in possession

and that by way of defence he can impugn the validity of the sale in favour of the Plaintiff.

I shall now discuss the decisions cited by the learned Counsel Sri G. Ramanujam chronologically. The first decision cited by him is Kurri

Veerareddi v. Kurri Bapireddi ILR (1906) Mad. 336. I have already pointed out that it has been distinguished in Malaimel Thiruvenkatachariar

and Another Vs. Pari Seshadri Iyengar and Others, and it is the latter decision which will apply to the present case. The next decision is

Madhavarapu Sathiraju and Others Vs. Madhavarapu Venkanna and Others, . It is not really relevant on the point before us. The appeal in this

Court arose out of a suit for recovering a sum of Rs. 4,319 from the property in the hands of the first Defendant and personally from Defendants 2

to 6. The claim was made under the following circumstances. The Plaintiffs had, in pursuance of an agreement of sale, dated 26th January 1928,

obtained a sale of the properties on 28th January 1928 from Defendants 2 to 6 and obtained possession. The first Defendant, however, alleged

that there was an earlier agreement in his favour and he filed the suit Original Suit No. 8 of 1928 for specific performance thereof impleading the

purchasers (Plaintiffs in the later suit). Pending that suit Original Suit No. 8 of 1928 the Plaintiffs discharged the mortgage on the properties by

paying Rs. 12,000 and odd. The suit for specific performance was decreed and the Plaintiff therein (the first Defendant in the later suit) was

directed to deposit Rs. 14,000 and odd leaving only the equities between the Defendants in that suit to be worked out later. That reservation was

made because the mortgagors, Defendants 1 to 6, contended that only a sum of Rs. 8,000 was due to the mortgagee and that the Plaintiffs were

not entitled to claim more than that amount. The Plaintiffs were consequently allowed only to withdraw Rs. 8,000. The Plaintiffs, therefore, brought

the later suit for recovery of the sum which they had paid in excess of Rs. 8,000. The claim that they were entitled to recover that amount from the

properties which, in pursuance of the decree of specific performance, the first Defendant had taken possession of and personally from Defendants

2 to 6. The trial Court dismissed the suit. The Plaintiffs appealed. The first question raised by them was whether they were entitled to recover the

amount from the properties in the hands of the first Defendant. The learned Judges answered it in the negative pointing out that the first Defendant

deposited the amount representing the full value of the properties free from the mortgage. In other words, on the deposit of Rs. 14,000 and odd by

him, the properties were no longer liable to satisfy the mortgage. Incidentally, however, the learned Judges made the following observation:

As provided in Section 91, Trusts Act, the natural result of the Plaintiffs having purchased the property with notice of the prior contract in

Defendant l''s favour was that they must hold the property for the benefit of the latter to the extent necessary to give effect to the contract. For all

other purposes, and as between themselves and their vendors, the Plaintiffs were the owners: Subbiah Pillai v. Vellappa Naicker (1912) 13 I.C.

And this is the reason why several cases have held that in such circumstances the decree for specific performance must direct the first

purchaser also to join in executing the conveyance: Gaffur v. Bhikaji ILR (1902) 26 Bom. 159 and Gudur Ranga Reddi, died, and Others Vs.

Gundala Pitchi Reddi and Another, . Even in such a case, the defeated purchaser may in certain circumstances be entitled to the benefit of

subrogation as held by the Privy Council in Nasiruddin v. Ahmed Hussain AIR 1926 P.C. 109. But here, the Plaintiffs were parties to the suit for

specific performance and the decree in that suit directed Defendant 1 to deposit in Court an amount representing the full value of the property and

not merely the value of the equity of redemption subject to the mortage.

The above observations would only show that if it had been necessary for the first Defendant to file a suit for specific performance of the

agreement of 17th July 1951 he should have impleaded not merely Appavu Pillai but also the Plaintiff. But the observations do not touch the

question before us.

In Sadei Sahu Vs. Chandramani Dei and Another, Pat. 60 the facts were these. On 5th December 1927, one Alekh Sahu agreed to sell the

disputed property to the Appellant. On 20th June 1930, Alekh Sahu entered into a second agreement under which he contracted to sell the

disputed property to the Respondent, and on 16th July 1930, he actually executed the sale deed in favour of the Respondent and delivered

possession to the Respondent. On 16th July 1930, but subsequent to the actual execution of the above mentioned sale deed to the Respondent,

the Appellant instituted Original Suit No. 242 of 1930 against Alekh Sahu claiming specific performance of the contract of sale of 5th December

1927. He admitted in his evidence that when he instituted the suit he was aware of the prior execution on that day of the deed of sale to the

Respondent. He did not, however, see fit to implead the Respondent in that suit. The deed to the Respondent was actually registered three days

later. The Appellant''s suit for specific performance was decreed against Alekh Sahu and in execution thereof he applied for possession. The

Respondent intervened with a claim. His claim was dismissed, and he, therefore, commenced the suit under Order XXI, Rule 103, Code of Civil

Procedure, which gave rise to the second appeal in the High Court. It was held that the Appellant must fail because he should have impleaded in

his suit Original Suit No. 242 of 1930 the Respondent to whom title had passed by the execution of the sale deed (though it was registered later,

the registration would, u/s 47 of the Registration Act, date back to the time of execution) and the remedy by way of specific performance against

the Respondent was barred under Article 113 of the Limitation Act, 1908. The above decision can, however, be distinguished from the present

case on the ground that in the above case the Appellant was seeking to dispossess the Respondent, who was already in possession. In the case

before us the first Defendant is only trying to defend his possession.

In Appa Rao v. Veeranna (1952) 2 M.L.J. 160, the next case cited by Sri G. Ramanujam, the facts were these. One Ramanna agreed to sell

the properties to the Plaintiffs'' grand-father Veeranna, but sold the same to one Sattiraju. The grand-father Veeranna, however, obtained a decree

in Original Suit No. 1174 of 1916 for specific performance impleading Ramanna and Sattiraju. The sale deed in pursuance of the decree, however,

was executed only by Ramanna without Sattiraju joining in it. When the grandson Veeranna filed the suit Original Suit No. 212 of 1946, which

gave rise to the second appeal, for possession of the properties from certain mortgagees, the defence was that Sattiraju not having joined in the

sale, no title passed to the grandfather Veeranna. Subba Rao J., as he then was, analysed the legal position and accepted the proposition that

clearly it was necessary for Sattiraju to have joined in the sale deed because the title had vested in him and his sale was only voidable and not void.

But the learned Judge went on to point out on an actual interpretation of the decree in Original Suit No. 1174 of 1916, that in those proceedings

the parties had agreed that the sale deed in favour of Sattiraju should be set aside and Ramanna should convey the property to the grand-father.

Because the sale in favour of Sattiraju had been set aside he ceased to have any interest and that was why he did not join in the sale deed. In this

view, the title in the Plaintiff was upheld and the second appeal was dismissed. It will be seen that the question before us was not decided by

Subba Rao J. It is interesting to note that the learned Judge discussed the decision in Malaimel Thiruvenkatachariar and Another Vs. Pari Seshadri

Iyengar and Others, to some extent, and though there is some criticism of a portion of Srinivasa Ayyangar, J''s observation, Subba Rao J., does

not doubt the correctness of the decision itself in Malaimel Thiruvenkatachariar and Another Vs. Pari Seshadri Iyengar and Others, .

In Lala Durga Prasad and Another Vs. Lala Deep Chand and Others, the facts were these. The appeal to the Supreme Court arose out of a

vendees'' suit for specific performance of a contract of sale, dated 7th February 1942. The vendor was the first Defendant called the Nawab. At

the time of the suit he was in Pakistan and his property had been taken over by the Custodian of Uttar Pradesh. The second and third Defendants,

who were the Appellants, were subsequent purchasers. The only question urged before the Supreme Court by the Appellants was whether the

agreement of 7th February 1942 was a concluded one. Their Lordships agreeing with the High Court held that it was a concluded one. The

question arose as to what has to happen to the sum of Rs. 62,000 deposited by the Plaintiff as a sale price. The subsequent purchasers, namely,

second and third Defendants claimed that out of it they must be paid Rs. 58,000 which they had already paid to the Nawab in connection with

their purchase. On the other hand, the Custodian, Uttar Pradesh, claimed that he should be paid the entire sum of Rs. 62,000 leaving it free to the

second and third Defendants to pursue their remedy against the Nawab or the Custodian, Uttar Pradesh in respect of the sum of Rs. 58,000 in

other proceedings. Their Lordships of the Supreme Court had no hesitation in directing the payment of Rs. 58,000 to the second and third

Defendants. Before discussing that main question, their Lordships dealt with the proper form of decree in a suit for specific performance. They

pointed out that there were three lines of thought according to the decisions. One was to declare the subsequent purchase void as against the

Plaintiff and direct conveyance by the vendor alone. Second considered that both, vendor and vendee should join, while a third would limit

execution of the conveyance to the subsequent purchaser alone. Their Lordships rejected the first and third and indicated that the second was the

correct form of decree. Regarding the first, they pointed out that the sale to the subsequent purchaser was not void but only voidable at the option

of the earlier agreement-holder and, therefore, title no longer rested in the vendor and there would be no point in asking him alone to convey to the

Plaintiff unless steps were taken to re-vest the title in him either by cancellation of the subsequent sale or by reconveyance from the subsequent

purchaser to him. As regards the third alternative, they pointed out that it would no doubt have the effect of vesting the title to the property in the

Plaintiff, but it might be inequitable to compel the subsequent transferee to enter into terms and covenants in the vendors'' agreement with the

Plaintiff to which he would never have agreed had he been a free agent. They then observed at page 369:

In our opinion, the proper form of decree is to direct specific performance of the contract between the vendor and the Plaintiff and direct the

subsequent transferee to join in the conveyance so as to pass on the title which resides in him to the Plaintiff. He does not join in any special

covenants made between the Plaintiff and his vendor; all he does is to pass on his title to the Plaintiff.

The above decision only lays down what is the proper form of decree to be passed if the first Defendant had to institute a suit for specific

performance against Appavu Pillai and the Plaintiff, and the decision does not, in my opinion, touch the decision in Malaimel Thiruvenkatachariar

and Another Vs. Pari Seshadri Iyengar and Others, according to which it is open to the first Defendant to defend his possession without filing a suit

for specific performance and that in such a case limitation is no bar to the defence.

The next case cited is Sivarama v. Thiruvadinatha AIR 1957 T.C. 189. The facts do not seem to be quite correctly reported. But so far as is

material for us, it is enough to state that two suits were filed for redemption of identical properties. The suits were Original Suit Nos. 49 of 1124

and 247 of 1124. The sale deed in favour of the Plaintiff in the leading suit Original Suit No. 49 of 1124 was earlier than the sale deed in favour of

the Plaintiff in the later suit Original Suit No. 247 of 1124. But the Plaintiff in the later suit claimed priority on the ground of an earlier agreement of

sale in his favour by the owners. It was held firstly that the earlier agreement by itself was not enough to confer priority by virtue of Section 54 of

the Transfer of Property Act and that the earlier sale in point of time, namely, the sale in favour of the Plaintiff in Original Suit No. 49 of 1124

would prevail and not the later sale. Secondly it was held that the prior agreement pleaded was not true. It will be seen, therefore, that the decision

does not touch the question before us.

In Ram Sworup Singh Vs. Mahabir Mahton and Another, the Plaintiff filed a suit for specific performance of the agreement of sale, dated 2nd

March 1953 but without impleading the subsequent purchaser Amrit Lal Sahu to whom the owner had sold the property in the later half of March

1953. Though the attention of the Plaintiff was drawn to this omission, he did not rectify it though there was still time to implead Amrit Lal Sahu,

and it was principally on that ground that the learned Judge held that specific performance being an equitable relief to be granted on a consideration

of all the circumstances of the case, that was not a case where specific performance could be decreed because the relief was not likely to be

effective in the absence of Amrit Lal Sahu particularly when the Plaintiff was seeking to recover possession. This case is clearly distinguishable and

does not touch the question before us.

In the result, the second appeal fails and is dismissed with costs. The deed exhibit A-1, dated 19th July 1951, is declared invalid against the first

Defendant. No leave.