Mathu Sree Akkabai Ammani Charitable Trust vs Samikkannu, rep. by Power Agent Mohan

K.B.K. Vasuki, J.—The defendants trust is the appellant herein. This second appeal is filed against the judgment and decree made in

A.S.No. 11 of 2007 on the file of Subordinate Court, Pattukottai, reversing the judgment and decree made in O.S. No. 97 of 1997 on the file of

the District Munsif Court, Pattukottai. The suit is filed by the respondent herein for the relief of permanent injunction, restraining the defendants or

their men from any manner interfering with the plaintiff''s peaceful possession and enjoyment of the suit property as lessee. The suit reliefs is claimed

in respect of 7-1/2 cents out of 1 acre and 27 cents in S. No. 86L/2, Periyakadai Street, Pattukottai, comprised within the four boundaries note

fully described in the suit schedule. The suit was filed by one Samikannu represented by his Power Agent on the premises that the suit property

belonged to the defendants'' trust and one Thirunavukkarasu, who is none else than the brother of Samikannu, was given permanent lease for 99

years in respect of 3 and 4-1/2 cents in S.No. 86L/2 by two registered lease deeds, dated 13.07.1978 and 02.02.1981, respectively, executed by

the then trustee of the defendants trust and since then, Thirunavukkarasu has been in possession and enjoyment of the entire suit extent as lessee of

the defendants trust and in the family partition, effected on 27.01.1992, between the plaintiff Samikannu and his brother Thirunavukkarasu, the suit

property was allotted to the plaintiff and the plaintiff has been using the same as backyard for his multi-storied commercial complex and lodge

situated on the east and north of the suit property by raising coconut trees and the same is sought to be interfered with by the defendants.

The suit relief is seriously opposed by the defendant trust, who is admittedly the owner of the property, by denying the genuineness and valid

execution of Exs.A1 and A2, lease deeds and Ex.A3 family arrangement and the plaintiffs possession and enjoyment of the property in pursuance

of the family arrangement. According to the defendants'' trust, the possession is continued to be with the defendants'' trust cum owner.

With the above pleadings, the trial Court framed the following issues for its determination in the suit;

a) Whether the plaintiff is a permanent resident of Singapore, if so, whether he has to be non-suited under the provisions of Foreign Exchange

Regulation Act?

b) Whether the two lease deeds relied upon by the plaintiff have been acted upon and have been given effect?

c) Is it correct to say that the lease deeds are not true and valid and they do not relate to the suit property?

d) Whether the plaintiff is in possession and enjoyment of the suit property as claimed by him?

e) Whether the suit is bad for mis-joinder of parties?

The parties in order to prove their respective claim examined the power agent of the plaintiff and his witnesses and the third defendant and their

witnesses as PW1 to PW3 and DW1 and DW2 and have produced Exs.A1 to A5 and B 1 to B9 documents.

The trial Court, on the basis of the available evidence, arrived at a conclusion that Exs.A1 and A2, lease deeds are true, valid and acted upon

and the lessee Thirunavukkarasu had been put in possession and enjoyment of the suit property in pursuance of the lease deeds. The trial Court

has, however, had not accepted the plaintiffs claim of possession and enjoyment of the suit property, in pursuance of the family arrangement and

the trial Court, having found that the plaintiff failed to prove his possession and enjoyment of the suit property, held that the plaintiff is disentitled to

the relief of permanent injunction and hence, dismissed the suit. Aggrieved against the same, the plaintiff preferred A.S.No. 11 of 2007. The lower

appellate Court, on the basis of the respective claim made by the parties and the nature of the controversy in issue and the finding of the trial Court

in the light of the evidence, framed the following points for its determination in the appeal :

The lower appellate Court has accepted the finding of the trial Court regarding the validity of Exs.A1 and A2, lease deeds and Ex.A3 family

arrangement and also accepted the plaintiffs claim regarding his possession and enjoyment of the suit property and reversed the finding of the trial

Court. The lower appellate Court relied upon the judgment made in O.S. No. 274 of 1995 in deciding the question of enjoyment of the suit

property and decreed the suit as prayed for. Hence, this second appeal before this Court by the defendants.

This second appeal is admitted on the following substantial questions of law:

(1) Whether the judgment and decree of the Court below is perverse on account of its misconstruction of documents Exs.A1 and A2?

(2) Whether the findings of the Court below is erroneous on account of its failure to consider Exs.Al and A2 and in the light of Section 36 of Indian

Trust Act and Section 23 of Indian Contract Act disabling the respondent from enforcing a lease agreement which is illegal?

At the time of argument, this Court framed the following additional substantial questions of law for the determination of the second appeal:

(1) Whether the lower appellate Court is right in granting the equitable relief of permanent injunction on the basis of invalid transactions under

Exhibits A1 and A2 and inadmissible document Exhibit A3?

(2) Whether the lower appellate Court is right in relying upon the judgment in O.S. No. 274 of 1995 to decide the question of enjoyment even

though the judgment is not marked as a document nor put to any of the witnesses during trial?

(3) whether Exs.A1 and A2 lease deeds are hit by the relevant provisions of law u/s 31 of the Foreign Exchange Regulation Act?

(4) Whether the finding of the Lower appellate court on the basis of Ex.A3 family arrangement is perverse and vitiated?

Heard the rival submissions made on both sides and perused the records.

The suit is filed for the relief of permanent injunction to protect the plaintiffs possession and enjoyment of the suit property, measuring 7-1/2

cents out of 1 acre 27 cents in S.No. 86L/2 comprised within four boundaries, as described in the plaint. Both the Courts below mainly relied

upon the same set of documents to negative and accept the plaintiff''s claim for possession and enjoyment of the suit property. The plaintiff based

his claim on Exs.A1 to A3. While Exs.Al and A2 are styled as permanent lease deeds executed by the then trustee of the defendant trust in favour

of one Thirunavukkarasu, who is the brother of plaintiff Samikannu. Ex.A3 is purported to be the deed of family arrangement entered into between

the plaintiff Samikannu and his brother Thirunavukkarasu, who are the permanent residents of Singapore. The claim of the plaintiff is that his

brother Thirunavukkarasu is permanent lessee of the suit property under Ex.A1 and A2 lease deeds and the suit property, in the family

arrangement entered into between his brother Thirunavukkarasu and himself under Ex.A3, is allotted to the plaintiff and he has been since then in

possession and enjoyment of the suit property.

As far as the execution of Exs.Al and A2 lease deeds are concerned, the same is, though denied in the written statement filed by the

defendants, admitted by the third defendant/DW1 and his witness/DW2 in the witness box. The first defendant is the Managing Trustee of the

defendant trust and the third defendant is none else than the father of the defendants 1 and 2. DW1, while being examined on behalf of the

defendant trust, admitted the execution of both Exs. A 1 and A2 lease deeds in favour of Thirunavukkarasu and also the fact that

Thirunavukkarasu is put in possession and enjoyment of the suit property in pursuance of Exs.A1 and A2 lease deeds. DW1 also admitted the

institution of O.S. No. 274 of 1995 by the defendant trust against Thirunavukkarasu and the defence raised therein by the lessee and the total

extent in respect of which the suit relief is sought for and the nature of interim injunction granted in favour of the defendant trust, appointment of

Advocate Commissioner and his visit to the suit property and about report and plan filed by the Advocate Commissioner and the final outcome of

the suit, which was subsequently dismissed and produced the documents relating to the proceedings as Exs.B2 to B5 and B8.

Both the courts below have also referred to the pleadings raised in the earlier suit O.S. No. 274 of 1995 and the documents relied upon by the

parties and their identity in both the suits. Both the courts below thereafter, by relying upon the admission made by the defendants regarding

outcome of the earlier suit and the findings based on which the earlier suit is disposed of, accepted the plaintiffs claim regarding original lease deeds

executed in favour of Thirunavukkarasu and possession and enjoyment of Thirunavakkarasu on the strength of such lease deeds. The contesting

defendants, having made specific admission about all material aspects in respect of earlier proceedings in O.S. 274 of 1995, are now estopped

from questioning the correctness of the findings of the Court below based on earlier proceedings without production of any records particularly

judgment and decree in OS. No. 274 of 1995. As the nature and outcome of the proceedings is admitted, the question of proving the same on the

basis of documentary evidence does not arise. In view of their admission, the contesting defendants cannot also be permitted to question the

genuineness and execution of Exs.A1 and A2 lease deeds.

However, the defendants have in the second appeal questioned the validity and legality of Exs.Al and A2 lease deeds on different legal grounds

by resorting to relevant provisions of Section 36 of the Indian Trust Act and Section 23 of the Indian Contract Act and also Section 31 of the

Foreign Exchange Regulations Act. It is contended by the learned counsel for the defendants that the permanent lease deeds executed in favour of

the original lessee by name Thirunavukkarasu are, for want of any permission from the Principal Civil Court of original jurisdiction, unlawful and

convey no right to the lessee, as such, the possession and enjoyment of the demise property by the lessee is unauthorised and neither the lessee nor

any one claiming under him can seek any legal protection to the same. The validity of Exs.Al and A2 lease deeds are also challenged for want of

any prior permission from Reserve Bank of India as contemplated u/s 31 of the Foreign Exchange Regulation Act (hereinafter shortly referred to as

''FERA''). One more legal ground sought to be raised herein is that consideration for execution of Exs.A1 and A2 lease deeds being unlawful, the

lease deeds are unenforceable under law u/s 23 of the Indian Contract Act.

Per contra, the learned counsel for the respondent/plaintiff, by relying upon the following judgments, sought to defend the legality and validity of

lease in question; Kadhir Masthan Rowther Vs. Segammal, (ii) R. Sambasivam Vs. Thangavelu Dhanabagyam and (iii) (2011) 1 MLJ 674= 2010

5 L.W. 80 (Sivaprakasam v. Hangovan).

It may be true that u/s 31 of the FERA Act, no person who is not a citizen of India, and no company other than a banking company, which is

not incorporated under any law in force in India, shall except with the previous general or special permission of the Reserve Bank, acquire or hold

or transfer or dispose of by sale, mortgage, lease for a period not exceeding 5 years, gift, settlement or otherwise any immovable property situate

in India. However, our High court in the judgment reported in (2011) 1 MLJ 674 (Sivaprakasam v, Ilangovan), following the judgment reported in

(2001) 1 LW 161 (R. Sambasivam v. Thangavelu Dhanabagyam) has laid down that the transfer in contravention of provisions of Section 31

attracts only the penal provisions of Sections 50 and 56 of FERA Act and it will not have the effect of nullifying the transfer. It is categorically

observed therein that even if there is a violation of provisions of FERA Act, it is for the concerned authorities to take action against the person

concerned under the relevant provisions of the Act and it will not invalidate the transfer. Applying the same view to the facts of the present case,

this court is inclined to hold that the permanent lease deeds executed in favour of Thirunavukkarasu by the defendant trust without the permission

of Reserve Bank of India does not in any manner affect the validity of lease.

Regarding sanction of the lease by the Principal Civil Court of original jurisdiction u/s 36 of the Indian Trust Act, the lease for the period above

21 years, as per the judgment reported in Vo Kadhir Masthan Rowther Vs. Segammal, is not void, but voidable at the instance of the trust. The

Division Bench, by following the earlier judgments of our High court in Kadir Ibrahim Rowther and Others Vs. Arunachellam Chettiar and Others,

is pleased to hold that though the finding based upon Section 36 applies to private trust, the principle appears to be the same that the lease of trust

property, which is in excess of the trustee''s power is not void, but only voidable. As rightly argued by the learned counsel for the plaintiff, the

defendant trust, having failed to take any action to declare the lease deeds as voidable, is estopped from denying the validity of the lease created in

favour of his brother Thirunavukkarasu in the suit instituted by the plaintiff to protect his possession.

As far as the plea regarding void nature of transfer u/s 23 of the Indian Contract Act is concerned, no serious argument is advanced as to how

and in what manner, the consideration or the object of transfer is unlawful, as such, the objection raised in this regard is liable to be negatived.

Thus, the discussion held above and the outcome of the same are in support of validity of Exs.Al and A2 lease deeds executed in favour of the

plaintiffs brother Thirunavukkarasu.

As far as the plaintiff is concerned, he claims to be in possession of the property only on the strength of Ex.A3 family arrangement purported to

be entered into between the original lessee Thirunavukkarasu and the plaintiff. The suit is filed for the relief of bare injunction by the plaintiff

Samikkannu represented by his power agent Mohan/PW1. However, PW1 Mohan has, in the course of his cross examination, introduced a new

theory as if the suit is filed on behalf of the original lessee Thirunavukkarasu, who figured in the suit neither as the plaintiff nor as one of the plaintiff

side witness. Be that as it may, the plaintiffs claim is admittedly based on Ex.A3 family arrangement, which is not stamped and not registered.

While it is seriously argued on the side of the defendants that the same is inadmissible in evidence to establish any claim for right, title and

ownership of the property, the argument sought for is objected to by the learned counsel for the plaintiff on the ground that the same can be looked

into for collateral purpose to ascertain the nature of the plaintiffs possession and enjoyment of the suit property. It is also sought to be argued on

the side of the plaintiff that even assuming it to be true that the plaintiff is in unlawful possession of the suit property and has no right to remain on

the property, he cannot be dispossessed by the owner of the property, except by recourse to law.

The following authorities are relied upon by the learned counsel for the appellants/defendants and the plaintiff/respondent, in support of their

respective contentions:

On the side of the appellants/defendants :

(i) Rajamanickam and Others Vs. Elangovan and Others,

(ii) Dina Ji and others Vs. Daddi and others,

(iii) A.C. Lakshmipathy and another Vs. A.M. Chakrapani Reddiar and five others, and

(iv) R. Deivanai Ammal (Died) and M.K. Ramalingam Vs. G. Meenakshi Ammal, Sivasubramanian and G. Ramasamy

On the side of the respondent/plaintiff:

(i) Bondar Singh and Others Vs. Nihal Singh and Others, and

(ii) Krishna Ram Mahale (Dead), by his Lrs. Vs. Mrs. Shobha Venkat Rao,

It may be true that the Division Bench of our High court in A.C. Lakshmipathy and another Vs. A.M. Chakrapani Reddiar and five others, and

R. Deivanai Ammal (Died) and M.K. Ramalingam Vs. G. Meenakshi Ammal, Sivasubramanian and G. Ramasamy categorically laid down the

following principles among other principles; (i) when the parties reduce the family arrangement in writing with the purpose of using that writing as

proof of what they had arranged and where the arrangement is brought about by the document, the document would require registration, as it is

then that it would be a document of title declaring for future what rights in what properties the parties possess (ii) if the family arrangement is

stamped, but not registered, it can be looked into for collateral purposes; and (iii) the family arrangement which is not stamped and not registered,

cannot be looked into for any purpose, in view of the specific bar in Section 35 of the Indian Stamp Act. Whereas, the Supreme Court in para 5 of

its judgment reported in Bondar Singh and Others Vs. Nihal Singh and Others, held that the document which is unstamped and unregistered,

though not admissible in evidence, can be looked into for collateral purposes and collateral purpose to be seen in the case dealt with by the

Supreme Court, is the nature of possession of the plaintiffs over the suit land.

That being the legal position laid down by the Supreme Court, Ex.A3 family arrangement can be looked into for collateral purpose. Even

otherwise, the reading of Ex.A3 family arrangement reveals that the same is only an agreement to enter into division i.e., mode of division of the

property in the manner as mentioned therein and no division is effected or brought about and no right is created under the document, as such, it

does not require to be stamped or registered.

However, Ex.A3 cannot be relied upon to prove the plaintiff''s possession and enjoyment of the suit property as there is no specific clause in

the document to the effect that the parties are put in possession of their respective shares on the date of execution of the document. Excluding

Ex.A3 family arrangement, no other oral and documentary evidence is produced to prove the plaintiffs possession and enjoyment of the suit

property, based on which is the suit claim. Though the trial court has rightly found that the plaintiff failed to prove his possession, the lower

appellate court has totally on an erroneous approach to the facts of the present case and on erroneous finding that the trial court recognises the

plaintiff''s possession and enjoyment of the suit property, but wrongly dismissed the suit, reversing the final verdict of the trial court. The finding of

the lower appellate court that the plaintiff''s possession and enjoyment of the property on the basis of the earlier suit in OS. No. 274 of 1995 is

totally perverse, as the plaintiff''s claim is based on no evidence and is by overlooking material factors. When the plaintiff failed to prove his

possession, the ratio laid down in Krishna Ram Mahale (Dead), by his Lrs. Vs. Mrs. Shobha Venkat Rao, (dead) by his LRs v. Shobha Venkat

Rao) that he can be dispossessed only by recourse to law is not applicable to the facts of the present case. Viewing from any angle, the lower

appellate Court has grossly erred in disagreeing with the finding of the trial court and in reversing the same in respect of the plaintiffs possession and

enjoyment of the suit property on the basis of Ex.A3.

Thus, for the discussion held above, though the substantial questions of law (1) and (2) originally framed and the additional substantial

questions of law (1) to (3) are answered in favour of the defendants, in view of the findings of this court upon Ex.A3 family arrangement, which

answers the additional substantial question of law (4) against the plaintiff, the judgment and decree of the lower appellate court is liable to be

interfered with. In the result, the Second Appeal is allowed by setting aside the judgment and decree of the lower appellate court and by restoring

the judgment and decree of the trial court. No costs.