M/s. Vishnu and Co and Others vs K. Abdulkhader Haji and Others

Ramakrishnan, J.—The main dispute in the above appeal relates to the ownership of a Mercedez Benz air conditioned motor car bearing Registration No. OEG 3277, which was later changed to MMD 2901. The deceased 1st respondent in the above appeal who was the plaintiff in the suit and whose legal representatives are respondents 9 to 19 Wanted a declaration that he is the owner of the car and prayed for recovery of possession of the same. Defendants 5 and 6, the appellants in the appeal, denied the ownership of the plaintiff and contended that the car belonged to them as bona fide purchasers for value without notice of any defect in title. The trial court held that the plaintiff is the owner of the car and is entitled to recover the same. The contentions of defendants 5 and 6 Were specifically found against. The appellants challenge the said findings, of the trial court in this appeal. Briefly stated the facts necessary for deciding the appeal as borne out by the pleadings in the case are thus: According to the plaintiff the 1st defendant was the registered owner of the Mercedez Benz car with registration No. ORG 3277 described in the plaint schedule (hereinafter referred to as the car) The plaintiff purchased the car from the 1st defendant entering in to a written agreement dated 10-4-1974 with him. As per the agreement the price fixed was Rs. 1,25,000/-. An amount of Rs. 65,000/- was paid on 10-4-1974 itself. On payment of Rs. 65,000/- the first defendant delivered the car with the registration certificate to the plaintiff which he accepted. The plaintiff was in possession of the car thereafter. The balance amount payable was agreed to be paid on or before 10-7-1974. It was further agreed that the transfer of registration will be effected only on payment of the balance amount in full. Ext. XI'' is said to be a signed true copy of the agreement dated 10-4-1974. The true copy of the agreement was marked as Ext. X1 since the original was alleged to be irrecoverably lost. The balance amount was not paid in time. However, an amount of Rs. 35000/- was paid by the plaintiff to the 1st defendant on 30-8-1975 on which date a fresh agreement referring to the earlier agreement and purporting to be a renewal of the earlier one was entered into. Ext. X2 is the said agreement executed in a stamp paper. The terms of the said agreement were also more or less the same as that of Ext. X1. The receipt of Rs. 35,000/- paid on 30-8-1975 was acknowledged by the 1st defendant in Ext. X2 agreement itself and the balance amount of Rs. 25000/- was agreed to be paid on or before 30--3-1976. The plaintiff alleged that the balance amount of Rs. 25.000/- was also paid by adjustment of the amount due to the son of the plaintiff from the 1st defendant under Ext. X7, an agreement for sale of a plot of land entered into between the plaintiff''s son and the 1st defendant. Accordingly it was claimed that the plaintiff has become the absolute owner of the car'' and entitled to quite possession of the same.

It was further alleged that while the plaintiff was in person as a detenu under COFEPOSA, his nephew, the second defendant, was keeping possession of the car and the registration certificate. The plaintiff on release from the jail came to know that the 2nd defendant had wrongfully and illegally removed the car to Bombay without the knowledge and consent of the plaintiff and had entrusted it to the 3rd defendant for safe custody in his garage. But the 3rd defendant quite illegally forged necessary documents and got the registration transferred in his name on 17-11-1976/22-11-1976. Ext. B4 is the duplicate registration certificate of the car issued by the R.T.O. Bombay. The Registration No. of the car was also changed to MMD 2901. Later on 6-4-1977/7-4-1977 as per one and the same proceedings numbered as 327134/3272/29 two successive transfers of registration were effected, first in the name of the 4th defendant and second in the name of the 5th defendant. The plaintiff contended that the transfer of registration in the name of the 3rd defendant was one obtained on the basis of forged documents and is totally ineffective to convey any title to (he 3rd'' defendant. The successive subsequent transfers in the names of the 4th and 5th defendants seen to have been effected on one and the same day are also totally illegal and are part of a conspiracy hatched among the defendants to deprive the plaintiff of the ownership of the car in question.

It was further alleged in the plaint that on the basis of a criminal complaint filed by the 2nd defendant a case was registered as Crime No. 219 of 1977 D.C.B. (C.I.D.), Bombay against defendants 3 and 4 and the search made by the police in the said case disclosed that the car was dismantled probably to prevent detection and that the main part was secreted in the garage of the 8th defendant. The plaint also refers to the various criminal proceedings initiated by the 1st defendant and the other parties to the suit relating to the car in question and the orders passed in those proceedings by various courts including this Court. The claim of the 1st defendant, in the criminal proceedings C.C 209 of 1977 before the Additional First Class Magistrate, tell cherry to the effect that the balance amount of Rs. 25,000/-was not paid and as such he continues to be the owner of the car was totally denied by the plaintiff. It was contended that the plaintiff has become the absolute owner of the car on the basis of the sale in his favour effected by the 1st defendant and that he is entitled to get a decree for the recovery of possession of the car from the defendants, A claim for Rs. 10,000/-towards damages for the lossess suffered by him on account of the wrongful deprivation of the use of the car and expenses for replacing the damaged parts of the car was also made in the plaint.

The 1st defendant in his written statement specifically admitted the execution of Exts. X1 and X2 agreements, the payments of Rs. 65,000/-and Rs. 35,000/- made by, the plaintiff towards purchase price of the car and the delivery of the car to the plaintiff with the registration, certificate as was done by him in the criminal proceedings earlier in 1977. However, the payment of Rs. 25 000/-'' by adjustment alleged by the plaintiff was denied and it. was contended that the plaintiff committed breach of the agreement and the ownership of the car continued to vest in him-. But it was also specifically stated in the written statement itself that he is making a claim only for the recovery of the balance amount since it doubtful whether he can claim back the car itself invoking the penal clause in the agreement stipulating the return of the car on breach of the terms of the agreement. The allegation in the plaint regarding the fraudulent and illegal transfers effected in the name of defendants 3, 4 and 5 were admitted by the 1st defendant also. It was specifically stated that he has not submitted any joint application for transfer of the registration in the name of the 3rd defendant and that his signatures in the application for transfer submitted to the R. T. O., Bombay must have been forged by the 3rd defendant. Subject to his claim for Rs. 25,000/- the ownership of the plaintiff was specifically admitted by the 1st defendant. Accordingly the 1st defendant raised a counter claim in the written statement and paid necessary court fee also.

The 2nd defendant while denying the allegations in the plaint that he is also a party to the illegal removal of the car and the transfer of registrations effected in respect of the car contended that he has entrusted the car and the certificate of registration with the 3rd defendant only for safe custody and that the transfers of registration effected are all fraudulent and were effected without his knowledge and consent. According to him he was totally unaware of the alleged illegal actions of defendants 3 to 5 when they were perpetrated and when he came to know about such actions he filed a criminal complaint before the Bombay police who had registered a case against defendants 3 and 4 as C.C. 219 of 1977., He pleaded that he is totally innocent of all the illegal acts of defendants 3 onwards.

Defendants 4 to 6 filed separate written statements taking more or less the same contentions. First of all it was contended that the 1st defendant was having neither ownership nor possession of the car at any time. The plaintiff''s ownership as well as right to possession of the car was also denied by them. The 4th defendant contended that he is a dealer in second hand cars and had purchased the car in question for valuable consideration after duly verifying the registration book and immediately on such purchase had contacted several prospective buyers including the 8th defendant firm M/s. Vishnu and Co. Byculla, Bombay (hereinafter referred to as the firm) of which the 6th defendant is a partner. The date on which the 4th defendant purchased the car was not mentioned in the written statement, The firm agreed to purchase the car in exchange for their car bearing registration No. MRJ 4708 and an additional payment of R.15,000/-. Thus the car Was sold to the firm and the registration of the car was transferred in the name of the 5th defendant. The 4th defendant contended that the agreements stated to have been entered in to between the plaintiff and the 1st defendant for the sale of the car are all collusive agreements created for the purpose of defeating his rights over the car and for harassing him. It was contended that he is a bona fide purchaser for value without notice of the title of the plaintiff. He sold the car to the 5th defendant after receiving full consideration. The 5th and 6th defendants also adopted -the same contentions raised by the 4th defendant and contended that they are also bona fide purchasers for value and that they are not parties to any illegal actions as alleged by the plaintiff. They also denied the allegation that the car was dismantled purposely and important parts of the car were secreted in the garage of the 8th defendant. They state that the gear box of the car was damaged and the car required major repairs and it was only for the purpose of repairs that the car was entrusted with the 8th defendant. Defendants 8 and 9 filed written statements denying the plaint allegations and contending that they are unnecessary parties to the suit and that it was as entrusted by the 5th defendant that they came to be in custody of the car for repairs.

Defendants 3 and 7 remained ex parte.

The plaintiff filed a rejoinder traversing the contentions raised by the defendants.

The plaintiff produced certain documents and got Exts. X1 to X14 produced through third parties. Apart from producing documentary evidence the plaintiff examined ten witnesses including himself. P.Ws. 9 and 10 were examined to prove Exts. X9 to X13 which according to the plaintiff would show that the transfer of registration of the car in favour of the 3rd defendant was got effected on the basis of forged documents where in the signature of the 1st defendant was forged. The other witnesses were examined to prove the identity of the 1st defendant as the original owner, the execution of the agreement payment of the sale price, delivery of the car and the agreement, pleaded by the plaintiff. In defence the contesting defendant produced documentary evidence to prove payment of consideration for the purchase of the car by them and that they are bona fide purchasers. One of the partners of the 5th defendant - firm was also examined as the solitary witness D.W. 1 on the side of the defendant.

The trial court on a detailed consideration of the entire oral and documentary evidence and the probabilities of the case found that L. T. Mohammed Kunhi shown in the registration certificate of the car is the 1st defendant. The 1st defendant was the registered owner of the car on 10-4-1974 the date of Ext. X1 agreement. It also found that Ext. X1 and X2 are genuine agreements executed by the plaintiff and the 1st defendant and that the car in question was delivered by the 1st defendant to the plaintiff with the registration certificate on the date of execution of Ext. X1 itself and the ownership of the car had passed on to the plaintiff from the date of Ext. X1 agreement. The court found that the entire sale consideration was paid as pleaded by the plaintiff. The counter claim put forward by the (sic)1st defendant was found to be not true and sustainable and as such liable to be dismissed The transfer in the name of the 3rd defendant as seen from Ext. B4 was found to be not genuine. The 5th and 6th defendants were found to be not bona fide purchasers for value without notice. The claim for damages was also ''found against and disallowed.

On the basis of the above findings" the suit wag decreed declaring- that the plaintiff is the rightful owner of the car MMD-2901 and that he is entitled to get possession of the said car from the defendants or any of them having custody of the car.

Defendants 5 and 6 have alone appealed against the decree passed by the trial court. They have challenged the decree in its entirety in the appeal. No appeal has been filed by the 1st ''defendant against the decree dismissing the counter claim for Rs. 25,000/-. Thus between the 1st defendant and the plaintiff, the finding that the entire sale price of the car stipulated in Exts. X1 and X2 agreements has been paid has become final.

The learned Counsel for the appellants Shri. T. S. Venkiteswara Iyer has strenuously contended that the finding by the learned Sub Judge that the plaintiff has become the rightful owner of the car, entitled to its possession, is unsustainable in law. He has also strongly challenged the correctness of the finding that Exts. X1 and X2 are genuine agreements whereby the title to the car passed to the plaintiff. The finding that the plaintiff has paid the entire sale price agreed to be paid under Exts. X1 and X2 has also been strongly disputed by the learned counsel as totally unsustainable. The learned counsel has argued further that there is absolutely no justification to hold that the appellants are not bona fide purchasers for value without notice of any defect in title and that they are liable to surrender possession of the car in favour of the plaintiff. According to counsel the suit ought to have been dismissed'' finding that the plaintiff has failed to establish both title to and right to possession of the car in question. However, it has to be pointed out that the learned counsel for the appellants has not canvassed the correctness of the finding of the trial court that L.T. Mohammed Kunhi whose name is shown in Ext. B4 is the 1st defendant himself. We think quite rightly too. Adverting to a number of facts and circumstances brought out in evidence the lower court has come to a positive finding that L.T. Mohammed Kunhi whose name is shown in Ext. B4 is the 1st defendant himself. We do not find that there is any justification to challenge the correctness of the said finding and we hereby confirm the same. The effect of the said finding is that the 1st defendant was the true registered owner of the car at least from. 15-2-1974 onwards and both the plaintiff and defendants 3 onwards could, it at all, claim only a derivative title from him.

Before considering the merits of the various contentions raised by the learned counsel for the appellants against the finding of the trial court, it may be mentioned that a(sic)plea of collusion between the plaintiff and defendants 1 and 2 was taken in the written statement of defendants 4, 5 and 6 without giving any other details. No evidence was also adduced to substantiate the said contention. The plea of collusion thus Jaised without any basis whatsoever is only to be rejected. We do so.

The contesting defendants have strongly disputed the genuineness of Exts. X1 and X2 agreements entered into between the plaintiff and the 1st defendant. However it has to be pointed out that the 1st defendant who is the sole party to Ext. X1 oilier than the plaintiff has specifically admitted its genuineness in his written statement. He has admitted so in Ext. X6 criminal complaint filed by him in 1977 before the Additional Judicial First Class Magistrate (A.F.C.M.) Court Tell cherry also. Thus the burden of proving the genuineness of the agreement becomes very light on the part of the plaintiff. It is the case of the contesting defendants that Ext. XI is a bogus agreement brought about by the plaintiff and the 1st defendant to defeat the claim of the 5th defendant. To show the bogus nature of the agreement Ext. X1 it was pointed out that though Ext. X1; agreement purports to be an agreement executed at Tell cherry on 10-4-1974, it could not have, been executed at Tell cherry on 10-4-1974. It was also pointed out that the allegations in Ext. X6 complaint filed by the 1st defendant was also to the effect that Ext. X1 was executed at Tell cherry. The said allegation is again a false statement deliberately made by the 1st defendant for the purpose of filing such a false criminal complaint. Exts. X3 and X4 certificates issued by Dr. K.N. Ravindran, Associate Professor of Cardiology, Medical. College, Calicut were relied upon to show that the plaintiff was an, inpatient in the Medical College Hospital from 13-3-1974 till 15-4-1974. Accordingly it was contended that Ext. XI could not have been executed on 10-4-1974 at Tell cherry as it purports to be. The plaintiff examined as P.W.2 has in detail explained in his evidence the circumstances under which Ext. XI happened to be prepared at Tell cherry and taken to his room in the Medical College Hospital, from where it was ultimately executed. He has stated that he had entrusted the 1st attesting witness in Ext. XI, namely, K.P. Abdulla who is now no more to prepare the agreement and other necessary papers by the time he reached Tell cherry on 10-4-1974 in connection with the talks to be held in the Muslim League office expecting that he will be discharged from the hospital on or before 10-4-1974. However, the doctor did not discharge him. Hence he had directed his driver to proceed to Tell cherry and to get the 1st defendant and the witnesses to the hospital at Calicut. Accordingly, the 1st defendant and the witnesses came to Calicut. It is in these circumstances, according to the plaintiff, the agreement Ext. XI happened to be executed from the Medical College Hospital. Since the agreement was actually prepared at Tell cherry and since it was intended also to be executed at Tell cherry, it was recited therein that it was executed at Tell cherry. But at the time of its actual execution in Calicut the said recital was omitted to be modified due to an oversight. This explanation given by the plaintiff has been accepted by the trial court as a genuine one. While accepting the genuineness of Ext. X1 agreement the trial court has taken note of the fact that there was a subsequent agreement entered into between the plaintiff and the 1st defendant on a stamp paper purchased in the name of the plaintiff marked as Ext. X2, wherein also the 1st defendant had admitted the execution of Ext. X1 agreement dated 10-4-1974. Ext X2 is dated 30-8-1975 and purports to be a renewal of Ext. X1. It also contained terms similar to the terms in Ext. X1 agreement. Apart from himself the plaintiff had examined P.W. 3 to prove the execution and genuineness of Exts. X1 and X2 P.W. 3 is one of the attestors to Exts. X1 and X2 agreements. He has also given evidence in accordance with the evidence tendered by P. W.2. Except stating that P.W.3 was a secretary of the Tell cherry Muslim League till 1977 and as such highly obliged to help the plaintiff nothing has been brought out in his cross - examination to discred(sic)t his evidence. He has spoken about the entire details regarding the execution of both the agreements especially the attest(sic)tion of them by himself and the deceased K.P. Abdulla. The trial court has believed the evidence of P.W.3 in proof of execution of the two agreements. The trial court took the view that since Ext. X2 agreement refers also to Ext. X1 agreement and Ext. X2 is an agreement executed on a stamp paper purchased in 1975, it is difficult to believe that Exts. XI and X2 agreements are documents fabricated by the plaintiff and the 1st '' defendant with the object of defeating the alleged claims of defendants 3 onwards since even according to them they got rights over the car only by October, 1977. On a careful consideration of the respective contentions of the parties and the evidence of P. Ws. 2 and 3, we are satisfied that the trial court was justified in holding that Ext. X1 and X2 are genuine documents. Accordingly, we reject the contention that Exts. XI and X2 agreements are not genuine and confirm the finding of the tiral court that Exts. X1 and X2 are genuine documents.

The next point to be considered is when exactly has title to the car passed to the plaintiff from the 1st defendant under Exts X1 and X2. Exts. XI and X2 would clearly show that the 1st defendant who was indisputably the owner of the car on 10-4-1974 had purported to sell the same to the plaintiff on 10-4-1974. The specific case of the plaintiff is that possession of the car was handed over to him in pursuance of the agreement Ext. X1, This fact is admitted by the 1st defendant in his written statement and in Ext. X6 complaint as already pointed out. Though the agreement provides for return of the car to the 1st defendant in the event of non payment of the balance consideration, the 1st defendant had not taken any steps to get back the car inspite of his contention that an amount of Rs. 25,000/- is due to him from the plaintiff. The 1st defendant himself has in his written statement chosen to describe the said provision in Ext. X1 as a penal clause and has confined his claim in the written statement for an amount of Rs. 25,000/- from the plaintiff. In other words the 1st defendant has conceded the ownership of the plaintiff over the car. In the light of the above facts and circumstances we find that there is no merit in the contention of the appellants that the title to the car has not passed to the plaintiff under the agreement on the date of the suit. The trial court has found specifically that the ownership or title to the car has passed on to the plaintiff even on the date of Ext. X1.- The learned counsel for the appellants has contended that the agreement has provided that title to the cat will pass to the plaintiff only on payment of the full consideration agreed by the parties and in the light of the counter claim put forward by the 1st defendant as per his written statement, it has to be held that there is a breach of the agreement and the title to the car has not passed on to the plaintiff. We have carefully gone through the terms and conditions of the agreements Exts. XI and X2. Though it is (rue that there is a clause in the agreement providing for return of the car on breach of the contract, we find it difficult to hold the same as a clause postponing the passing of title to the plaintiff. Similarly the stipulation that the registration of the car will be transferred to the plaintiff only on payment of full consideration cannot also be considered as a clause sufficient to postpone the passing of the title from the 1st defendant to the plaintiff. Transfer of registration of motor vehicles is an act statutorily contemplated to be done only after due transfer of title from one person to another and its postponement cannot stop the passing of title in accordance with the law regulating passing of title to goods '' sold and purchased. Understanding the entire recitals in Exts. X1 and X2 agreements in the (proper perspective, we are inclined to agree with the trial court in holding that the title to the car had passed to the plaintiff immediately on delivery of the car on 10-4-1974 on the basis of Ext. X1 agreement.

The finding regarding the payment of Rs. 1 lakh as acknowledged in Exts. X1 and X2 agreements towards the sale price of the car has also been challenged before us We have already found that Exts. X1 and X2 agreements are genuine documents executed by the plaintiff and the 1st defendant. The admission of the 1st defendant regarding the receipt of Rs. 1 lakh contained in Exts. X1 and X2 itself is sufficient to sustain the finding regarding the payment of Rs. 1 lakh effected by the plaintiff. Moreover the learned Sub Judge has, while arriving at the finding, considered at length the entire oral and documentary evidence adduced by the plaintiff to prove the payment of the amount of Rs. 1 lakh as acknowledged in Exts X1 and X2. We find that the said finding is based upon a proper appreciation of the available evidence in the case. We, therefore, find no reason to interfere with the said finding also.

The learned counsel for the appellants has challenge the finding of the trial court rejecting the counter claim of Rs 25,000/- put forward by the 1st defendant. The trial court accepted the plea of payment of the balance amount of Rs. 25,000/- by way of adjustment. As we have already pointed out, as between the 1st defendant and the plaintiff the said finding has already become final. The trial court has on a detailed consideration of the oral and documentary evidence adduced by the plaintiff to substantiate the plea of discharge put forward by him has accepted the same as sufficient to prove the plea of discharge. It is the case of the plaintiff that an amount of Rs. 25000/- was due from the 1st defendant to the plaintiff''s son under an agreement for sale of an item of property belonging to the 1st defendant and agreed to be sold to the plaintiff''s son. Later it was decided by the plaintiff''s son not to pursue the agreement to purchase the property. Thereafter the plaintiffs son and PW. 4 approached '' the 1st defendant and requested him to adjust the amount of Rs. 25,000/-paid as advance under the agreement marked as Ext. X7. This was agreed to by the 1st defendant and the agreement Ext. X7 was returned to the plaintiff''s son. AH the details of the mediation between the 1st defendant and the plaintiff''s son in this regard has been spoken to by PW. 4. After adverting to the oral and documentary evidence the trial court came to the conclusion that the plea of discharge put forward by the plaintiff is true. We find no reason to interfere with the said finding also.

We may at this stage usefully deal with another important aspect of the plaintiff''s case. The plaintiff and defendants 1 and 2 in their written statements have raised a contention that the 3rd defendant had fabricated transfer applications and other documents by forging the signature of the 1st defendant and has used them for getting a transfer of registration of the car in his name. This aspect of the case may have a great relevancy when we consider the claim of the appellants that the 5th defendant is a bona fide purchaser for value without notice of any defect in title and hence the 5th defendant is entitled to retain possession of the car even as against its true owner.

The plaintiff as PW. 2 has deposed to the effect that he had left the car and its registration book with his nephew who is the 2nd defendant in the suit when he was away in jail as a COFEAPOSA detenu for safe custody. It is his further case that while he was in jail, without his knowledge and consent the 2nd defendant took the car to Bombay and entrusted it to the 3rd defendant for safe custody. He came to know about the unlawful removal of the, car and the illegal transfer of its registration only when he came out of jail. Getting information of the illegal transfer of registration, the 2nd defendant had filed a criminal complaint numbered as C. C. 218 of 1977 before the D. C. B. (C.I.D.), Bombay alleging cheating and forgery against defendants 3 and 4. The 1st defendant had also filed a criminal complaint numbered as C.C. 209 of 1977 (Ext. X6) before the A.F.C.M., Tell cherry alleging forgery and other criminal offences against the plaintiff and other defendants. He also applied for a search warrant and the police searched and found the car in a dismantled condition in poona in the custody of defendants 8 and 9 Exts. A5 and. A6 certified copies of the search list and seizure mahasar were produced to prove the seizure of the car in a dismantled, condition and its production before the A F.C.M., Tell cherry. In the, course of investigation conducted by the police attached to the Bandra Police Station, they have seized the alleged forged transfer application forms and other papers used by the 3rd defendant for getting the transfer of registration of the car in his name. PW. 10 has spoken to the investigation conducted by him and the forwarding of the seized documents to PW. 9 the State examiner of documents attached to the State C.I.D. of Maharashtra State. He has further stated that the original of the forged applications are lost and could not be traced out. PW. 10 was cross-examined at length and nothing was brought out to discredit his evidence. He has also stated that there is record to show that they have got back the documents forwarded for examination from P.W. 9. PW 9 has produced Ext. X9 to X13, the negatives of the photographs taken by him for the purpose of examining the signature of the 1st defendant and the copy of the opinion submitted by him in response to the reference made to him by the Bandra Police and maintained by him. He has given evidence with reference to Exts. X9 to X13 and has stated that the signature found in the disputed document was definitely different from the admitted signature-of the 1st defendant. The trial court has after a detailed reference to the evidence of PWs. 9 and 10 the contents of Exts. X9 to X13 observed that it will not be proper to rely upon those copies alone in the absence of other documents and conclude that the signature of the 1st defendant had been forged. The trial court has found the evidence of PWs. 9 and 10 true and acceptable. In view of the evidence of PW. 10 to the effect that the original of Exts. X9 to X13 are lost irrecoverably the trial court should have held that Exts. X9 to X13 can be accepted and acted upon for the purpose of finding that the 3rd defendant had forged the signature of the 1st defendant in the joint transfer; application forms submitted to the R. T.O., Bombay and that the alleged joint transfer application was not a genuine application signed by the 1st defendant. We accordingly hold that the alleged joint application forms used by the 3rd defendant for getting the transfer of registration of the car in his name was a forged one wherein the signature of the 1st defendant was forged.

Dealing with the title claimed by the appellants, the learned counsel has argued that the appellants are bona fide purchasers of the car for valuable consideration from the 4th defendant after making due enquiries about the title of the 4th defendant and as such have acquired a valid title to the car in question. According to counsel the 5th defendant being a bona fide purchaser of the car for valuable consideration without notice of the agreement between the 1st defendant and the plaintiff, the 5th defendant''s title cannot be defeated by the plaintiff even if he had obtained title on the basis of his alleged purchase even before the purchase by the 5th defendant. It is argued that by parting with possession of the car and its registration certificate to strangers enabling them to sell the car as if the car belonged to them bona fide purchasers like the 5th defendant acquired title for valuable consideration and that would estop the plaintiff even if he is the true owner from denying the title of the 5th defendant and as such the plaintiff is not entitled to get any relief in the suit.

The evidence adduced to prove the payment of consideration and the nature of the enquiries made by the appellants before purchasing the car from the 4th defendant lies in a very narrow compass. One of the partners of the 5th defendant-firm is the only witness examined as D. W. 1 on the side of the defendants to prove the entire case pleaded by them. Ext. B5 receipt dated 7-4-1977 has been relied upon to prove the payment of the total consideration agreed to be paid for the car. Exts. B12 and B13 account books alleged to have been maintained by the firm in the ordinary course of its business was also relied upon to prove the payment of Rs. 15,000/-. DW. 1 has spoken about the circumstances under which and'' the terms subject to which the car was agreed to be purchased by the firm. He has deposed that the 4th defendant offered the car to the firm on 6-4-1977 and on behalf of the firm the 6th defendant''s husband settled with the 4th defendant the terms and conditions for the purchase of the car. On 6-4-1977 itself the car was sold to the firm. Even at the time when the offer was made the 4th defendant was having in his possession the car, its registration certificate and the documents necessary for effecting transfer of registration signed by the 3rd defendant. DW. 1 has deposed that the firm had only perused the entries in Ext. B4 registration certificate and the contents of the other documents available with the 4th defendant on 6-4-1977 to satisfy themselves about the title of the 4th defendant over the car DW. 1 has further stated that the firm wanted the 4th defendant to get the registration of the car transferred in his name before the registration is transferred in the name of the firm. He admitted that on 6-4-1977 the registration of the car stood in the name of the 3rd defendant and the firm has not made any enquiries regarding the title of either the 1st or the 3rd defendant. DW. 1 has said that he met the 3rd defendant for the first time only in June, 1977 and had stood surety for him in the month of August, 1977 as evidenced by Ext. A7 surety bond. He also stated that he knew where the 3rd defendant is living and had also discussed about the suit and the ownership of the car with him admitting thereby his close connection with him. During cross-examination DW. 1 stated that Exts. B12 and B13 account books were written by his account writer and that is still alive though he is not in their service at present. He has further admitted that Exts. B12 and B13 account books do not contain the seal or initials of the tax authorities to evidence, their production before the tax authorities as claimed by him. He has also admitted that the accounts of the firm were not audited even at the time of his examination in court. DW. 1 further admitted that both the 1st and the 2nd defendants have filed criminal complaints in 1977 at Tell cherry and Bombay respectively with reference to the car in question. Criminal complaint C. C. 218 of 1977 before Detection Crime Branch (C.I.D.), Bombay was against the 4th and 5th defendants alleging cheating and forgery. Police attached to Bandra Police Station conducted investigation and had questioned DW. 1 and other witnesses in the matter. The police was searching for the car. He has also admitted that the car was seized in a dismantle d condition from the premises of defendants 8 and 9 in Poona by police under order of the Additional First Class Magistrate, Tell cherry and was produced before the Magistrate Court as per seizure mahazars Exts. A5 and A6. He denied the suggestion that immediately after the purchase of the car by them, the car was deliberately removed to Poona and dismantled and kept in the custody of defendants 8 and 9 with the specific object of avoiding easy search and seizure by the police who were conducting investigations on the basis of the criminal complaint filed in Tell cherry and Bombay. While denying the above suggestion he has attempted to give an explanation as to how the car happened to be in Poona and in a dismantled condition. Thus he has stated that the ear was taken by the son of the 6th defendant for attending to a work at Poona about 22 days after its purchase. In Poona some trouble developed in the gear box of the car. The car had to be entrusted with the 8th defendant for repair. The gear box was removed and kept with the 9th defendant separately, being a very valuable part since the premises of the 8th defendant was not very safe. The car was kept in the dismantled condition from the last week of April till it was seized in September, 1977 since spare parts were not readily available. However, he was not able to say what exactly was the work to be attended to by the son of the 6th defendant in Poona and what exactly was the nature of the trouble There was also no satisfactory explanation offered by him for allowing; the car to be in the dismantled condition for such a long period except stating that spare parts were not available. This in substance is the oral and documentary evidence adduced to establish the plea that the 5th defendant is a bona fide purchaser of the car for valuable consideration.

It may be useful at this stage to refer briefly to the relevant provisions of the law and legal principles with reference to which the main point arising in the appeal, namely, the sustainability of the claim for a superior title put forward by a bona fide purchaser for value without notice as against the true owner; may have to be decided. Since the main dispute relates to the title to a car claimed by an alleged true owner against an alleged bona fide purchaser for value without notice, the provisions in the Sale of Goods Act, 1930 (Act. III of 1930) (hereinafter referred to as the Act) should largely govern the matter. Section 27 of the Act incorporates partially the general rule of English law that no one can transfer a better title to goods than he himself possesses. This rule is often expressed in terms of the latin maximum (sic)o dat quod non babet". Section 27 is in the following terms;

Sale by person not the owner.-- Subject to the provisions of this Act and of any other law for the time being in force, where goods are sold by a person who is not the owner thereof and who does not sell them under the authority or with the consent of the owner the buyer, acquires no better title to the goods than the seller had, unless the owner of the goods is by his conduct precluded from denying the sellers authority to sell:

Provided that where a mercantile agent is with the consent of the owner, in possession of the goods or of a document of title to the goods, any sale made by him, when acting, in the ordinary course of business of a mercantile agent, shall be as valid as if he were expressly authorised by the owner of the goods to make the same. Provided that the buyer acts in the good faith and has not at the time of the contract of sale notice that the seller has no authority to sell"; The principle underlying the Section is that prima facie the right of the legal owner should be protected unless he has donesom ething to induce innocent purchasers or pledgees; to believe that the immediate possessor of the goods is the true owner. Two exceptions to the strict general rule are provided in the above Section itself. Some others are contained in Sections 28 to 30 and 54 of the Act itself. Section 27 itself makes the rule subject to other exceptions provided by other laws. By providing exceptions to the general rule: which protects the true owner absolutely, the law had tried to make provision to - protect cases where goods are sold by persons who are not really entitled to sell thems This(sic) is an attempt to strike a balance between competing claims put forward by the true owners on the one hand and the bona fide purchaser on the other hand. This is required in the interest of trade and commerce. Thus, under the Indian law, a purchaser from a seller who has no title or authority to sell the goods can get a valid title to goods only in case he establishes that he comes under one or the other exceptions provided by law as indicated above. The exception relevant for the purpose of this case is the first exception provided in Section 27 itself. To bring the case within the first exception to Section 27 a person has to establish that he is a bona'' fide purchaser for value without notice of any defect in title and for that he has to prove that he had purchased the goods after proper enquiry into the right of the person in possession to make the sale. So, an honest purchase made carelessly without making proper enquiries cannot be said- to have been made in good faith to convey good title capable of defeating the title of the true owner. Again a bona fide purchaser for value without notice should further show that the true owner is in the circumstances of the case "precluded from denying the seller''s authority to sell". This exception is based on the principle of estoppel. Such an estoppel may arise either (1) by reason of a representation made by the true owner that the seller is the owner of the goods or (II) by negligence on the part of the true owner which enables the seller to create an appearance of ownership. Where negligence is relied upon as raising estoppel, it is necessary to show that the true owner owed the buyer a duty to be careful, that in breach of that duty the true owner was negligent and that this negligence was the proximate or real cause of the buyer being induced to part with the purchase price of the goods to the seller. Mere carelessness on the part of the owner to guard his goods does not however create an estoppel. Mere delivery by the true owner to another person of the possession of the goods or documents of title to goods does net estop him from asserting his title as against one who has purchased the goods from that person. A reference to a few passages from Benjamin''s Sale of Goods, Second Edn. at pages 465 and 470 would show that these principles are well settled principles governing acquisition of title by estoppel:

Where the true owner of goods, by words or conduct, represents or permits it to be represented that another person is the owner of the goods, any sale of the goods by that person is as valid against the true owner as if the seller were actually the owner thereof, with respect to anyone buying the goods in reliance on the representation. Although the representation may be by works or conduct, it must be clear and unequivocal. It is therefore well established that the mere parting with possession of goods is not conduct which estops the true owner from setting up his title. Parting with possession alone is not a representation of ownership, even if the person receiving the goods has the authority of the true owner to deliver them to third parties. If the rule were otherwise, any bailor would be estopped from denying his bailee''s right to sell the goods, and there would be no necessity at all for the Factors Acts. There must be something more. The true owner must have so acted as to mislead the buyer into the belief that the seller was entitled to sell the goods....................................

The circumstances in which negligence on the part of the true owner can raise such an estoppel are narrowly circumscribed. It is necessary for the buyer to show, first that the true owner owed him a duty to be careful; secondly, that in breach of that duty the true owner was negligent; and thirdly that this negligence was the proximate or real cause of the buyer being induced to part with the purchase price of the goods to the seller.

That these are the principles applicable in cases where title is claimed by a bona fide purchaser for value without notice relying upon the principle of title by estoppel, can be seen from important decisions rendered by both English and Indian Courts, Thus in the decision reported in Central Newbury etc. Ltd. v. Unity Finance. (1956) 3 All E.R. 905 while dealing with a claim based on title by estoppel two of the three learned Judges Lord Justice Hodson and Morris L.J. observed thus:

Hodson. L. J. : by delivering the car registration book, as well as the car itself, to C the plaintiffs had not given him the means of appearing to be the owner or of having apparent authority to sell the car, since the registration book was not a document of title to the car, and since delivery of the car without more would not have amounted to giving C. apparent authority to sell it; and therefore the plaintiffs, who were the true owners of the car were not estopped from denying the title of the third paries to sell the car to the first defendants, and were entitled to recover damages for its conversion.

Per Morris, L.I. : it cannot be assumed that the person in possession of a car and its registration book is the owner of the car. The absence of a registration book when a car is being sold will naturally give rise to much inquiry. The existence of one in the hands of a seller does not remove all occasion for inquiry and does not prove legal ownership.

Denning L.J. who dissented from the majority view upheld the claim of the bona fide purchase in a very forceful judgment in the following manner:

"It is said, however, that the original owner owed no duty to the innocent purchaser. I do not agree. When the original owner handed over the car and log-book to a complete stranger, intending to part with the property in them, he ought to have foreseen the possibility that the stranger might try to dispose of them for his own benefit to someone or other. That is what does happen when you hand over goods to a stranger reserving no right to yourself. The original owner'' owed a duty to any person to whom the stranger might try to dispose of them. The case comes within the words of Lord Wright in Mercantile Bank of India, Ltd. v. Central Bank of India, Ltd. (4) (1938) 1 All E. R. at p. 62):

''The duty may be, in the words of. Blackburn, J., ''to the general public of whom the person is one''.....His identity may be ascertainable only by the event, in the sense that he had turned out to be the member of the general public actually reached and affected by the conduct, negligence, representation or ostensible authority.

In the decision reported in Moorgate Mercantile Co. Ltd. v. Twitching (1977) A. C. 890 it was again held by the House of Lords that in the case of motor vehicles, delivery to another of possession of the vehicle with the vehicle registration book (or registration certificate) does not constitute a representation that the bailee has authority to sell the vehicle. It is interesting to note that the said decision was also a majority decision and two of the law Lords dissented from the majority and upheld the claim of the bona fide purchaser.

In the decision reported in Rameshwar Vs. Tarasingh and Others, a learned Judge of the Rajasthan High Court rejected the claim of a bona fide purchaser applying the above principles and finding that the bona fide purchaser has failed to bring his case within any of the exceptions to the principles contained in Section 27 of the Act.

Further it is necessary to refer to some of the relevant provisions of the Motor Vehicles Act, 1939 (Act IV of 1939) and to understand the exact scope and effect of the registration of the Vehicles under the said Act. and the nature and implications of the certificate of registration issued under the Act. Section 24(2) provides that the registering authority shall issue the owner of motor a vehicle registered by it in accordance with Sections 21 and 22 of the Motor Vehicles Act; a certificate of registration in the prescribed form It has been further provided in Section 31 of the said Act that whenever a transfer of ownership takes place the transferor as well as the transferee are bound to inform the registering authority of such transfer of ownership and on complying with the requirements of that Section the registering authority shall register the transfer reported to it. Provision is also made as to what should be done when the transfer is omitted to be reported by the transferor and transferee. Relevant portions of Section 31 are in the following terms :

Transfer of ownership.- (1) Where the ownership of any motor vehicle registered under this Chapter is transferred,-

(a) the transfer-or shall

(i) within fourteen days of the transfer, report the fact of transfer to the registering authority within whose jurisdiction the transfer is to be effected and shall simultaneously send a copy of the said report to the transferee;

(ii) within forty - five days of the transfer, forward to the registering authority referred to in sub-clause (i)-

(A) a no objection certificate obtained u/s 29-A;

(B) in a case where no such certificate has been obtained,--

(I) a receipt obtained under sub-section (2) of Section 29-A; or

(II) a postal acknowledgment received by the transferor if he has sent an application in this behalf by registered post acknowledgment due to the registering authority referred to in section 29-A, together with a declaration that he has not received any communication from such authority refusing to grant such certificate or requiring him to comply with any direction subject to which such certificate may be granted;

(b) the transferee shall, within thirty days of the transfer, report the transfer to the registering authority within whose jurisdiction he resides, and shall forward the certificate of registration to that registering authority together with the prescribed fee and a copy of the report received by him from the transferor in order that particulars of the transfer of ownership may be entered in the certificate of registration.

(1-A).........................

(1-B)...........................

(1-C)...........................

(2) A registering authority other than the original registering authority making any such entry shall communicate the transfer of ownership to the original registering authority.

From the above provisions it is evident that registering of the transfer of ownership is an act to be done by the statutory registering authority on the basis of the actual transfer of ownership already effected. It is only a record of the fact of change of ownership or title to a motor vehicle and cannot, be equated to an act necessary for transfer of ownership or" title. u/s 31 the statutory authority is bound to record what has been intimated to it and the authority has no option to refuse registration if the requirements of the Section are complied with. That this is the legal position can be seen from the decision reported in Santakumari v. R.T.O., Kozhikode, 1975 KLT 580 wherein it has been observed as follows :

From this it is clear that once the transferee reports the fact of transfer within 30 days to the registering authority and'' certificate of registration is also submitted in order that particulars of the transfer of ownership may be entered in the certificate of registration together with the prescribed fee and a copy of the report received by him from the transferor; and the transferor also makes a report of the transfer to the registering authority, the registering authority has no option but to make the necessary entries in the registration certificate.

The following observations in the decision reported in P.K. Panda Vs. Smt. Premalata Choudhury and Others, is also worth noting in this connection:

V

There is no provision of law that the registration of a motor vehicle with the registering authority is a sine qua non for transfer of ownership or that transfer without registration would be void or ineffective. The provisions of Ss. 22, 24 and 31 contemplate a completed transfer of ownership of a motor vehicle, The provisions of the Act. regarding registration of vehicles have nothing to do with ownership. They only provide for regulation of the use of the motor vehicles in public places. The certificate of registration issued under S. 24(2) of the Act is not a document of title, but it is a piece of evidence to show the owner of the vehicle who is liable to pay taxes and to perform duties and obligations under the Act............

In the light of the above legal principles we have to examine the sustainability of the claim of the 5th defendant for superior title as a bona fide purchaser for value. It is fairly clear from the evidence adduced by the contesting defendants and referred to earlier that on behalf of the 5th defendant no enquiry was made into the title of either the 3rd or the 4th defendant before agreeing to buy the car. No attempt has been made to prove payment of consideration by defendants 3 and 4 in support of their alleged title. Defendants 3 and 4 have chosen not to enter the witness box and give evidence in support of their claim for title to the car. Defendants 5 and 6 have also not taken any steps to summon them to give evidence in support of their title or authority to sell the car with a view to sustain their title. Thus there is total absence of any material to prove that defendants 3 and 4 have paid any consideration for the purpose of acquiring ownership of the car. Their claim for title is solely based on the entries in Ext. B4 registration certificate of the car.

The defendants have in fact attempted only to prove that they have before agreeing to buy the car examined the registration certificate of the car and have purchased the car by paying valuable consideration. It is in evidence that they have also insisted upon registration of the car being transferred in the name of the 4th defendant before it is transferred in the name of the 5th defendant. This would indicate that on behalf of the 5th defendant they wanted to avoid somehow all enquiries into the title of the prior owners and wanted to finalise the sale and transfer of registration of the car with undue haste and hurry. Offer as well as the sale of the car is alleged to have taken place on 6-4-1977. Application for transfer was made on 6-4-1977. Registration in the name of the 4th and 5th defendants were effected on one and the same day namely on 7-4-1977 and that too as per one and the same proceedings. On 6-4-1977 when the car was offered for sale, the registration of the car stood in the name of the 3rd defendant. In that view it was only reasonable and proper for defendants 5 and 6 to have enquired about the title of at least the 3rd defendant. They deliberately refrained from making any enquiry. Their conduct in deliberately avoiding all enquiries into the title of the prior owners and insisting upon and intermediate transfer in the name of the 4th defendant, a car broker, when there was no difficulty in arranging for a direct transfer in the name of the 5th defendant is highly significant, when it is remembered that the plaintiff had adduced evidence to probabilise his case that the 3rd defendant had illegally managed to get a transfer of the registration of the car from the name of the 1st defendant to his name forging the signature of the 1st defendant and that immediately after the purchase by the 5th defendant, the car was taken to Poena and allowed to be kept there in a dismantled condition for a considerably long period. We are of the opinion that in the facts and circumstances of the case defendants 5 and 6 have not only failed to prove that they have made reasonable and proper enquiries in the matter, but have also acted in a manner which lacks bona fide. The trial court has come to a definite conclusion after an elaborate discussion of all the relevant facts and circumstances either admitted or proved in the case, that defendants 3 to 5 had joined together and got the registration transferred first in the name of the 4th defendant and then in the name of the 5th defendant in order to see that no claim is made in respect of the car by anybody else. The evidence adduced by defendants 5 and 6 to prove payment of consideration by the 5th defendant is also not satisfactory at all. Exts. B12 and B13 are the ledgers produced by the defendants to prove payment of Rs. 15,000/-over and above the payment alleged to have been effected by the transfer of their Mercedez Benz car MRJ 4708 valued at Rs. 80,000/-. A number of reasons have been pointed out in the judgment of the lower court for not relying upon the said ledgers as genuine documents in proof of payment of Consideration on behalf of the- 5th defendant. The writer of the account has not been examined to prove-the entries in the ledgers. It was pointed out that though the accounts of the 5th defendant-firm is liable to be audited, they were actually not audited. It was argued that a perusal of the ledgers Exts. B12 and B13 would show that they are accounts written up at a stretch and cannot be relied upon. Moreover no reliable evidence have been produced to show that title to the car MRJ 4708 alleged to have been transferred to the 4th defendant towards part of the consideration has passed to the 4th defendant. Ext. B(sic)4 communication received by the 5th defendant from A.R.T.O. Bombay cannot be relied upon safely to come to a definite conclusion that there has been a completed transfer of title to the car MRJ 4708 in favour of the 4th defendant by way of part payment of consideration from the 5th defendant. We are inclined, in the circumstances of the case; to agree with the finding of the lower court to the effect that the 5th defendant is not a bona fide purchaser of the car for value without notice of any defect in title.

In the light of the above finding it becomes really unnecessary to consider the further argument of the learned counsel for the appellants to the effect that the plaintiff is estopped from disputing the title of the 3rd and the 4th defendants and thus defeating the title alleged to have been acquired by the 5th defendant as an innocent purchaser. However, since the learned counsel has argued the said point also at length, we propose to consider the merits of the sard contention also. The learned counsel has argued that by allowing the 3rd and the 4th defendants to have possession of the car with its registration certificate, the true owner has allowed them to deal with the car as their own and induce innocense purchasers like the 5th defendant to buy it for valuable consideration. In the circumstances, it was contended that by his negligent of careless conduct the plaintiff is estopped from disputing the title of the 4th defendant to sell the car. As has already been indicated above, mere carelessness or negligence on the part of the true owner in allowing the car to be possessed by strangers along with its registration certificate may not be sufficient to create an estoppel against the true owner. This is because the plaintiff owed no duty to the 5th defendant to take care and as such mere carelessness in respect of his car, even if there was any, may not amount to breach of any duty to take care. In the absence of a duty to take tare and its breach, the true owner will not be estopped from disputing the title of bona fide purchasers. There must be some further act on the part of the true owner which amounts to a representation by him of the seller''s right to sell. There -is no case for the contesting defendants in this case that the plaintiff or the 1st defendant had made any representation either by word of mouth or by conduct as a result of which the 5th defendant or any other defendant was induced to buy the -car. In fact the evidence on the side of the plaintiff would show that defendants 3 onwards were keeping possession of the car and its registration certificate quite illegally without the consent and knowledge of the plaintiff. In the circumstances, we find no merit in the above contention also. Thus we are in complete agreement with the finding of the lower court that the plaintiff has not lost his title to the car by estoppel and that he is entitled to get the reliefs of declaration and recovery of possession prayed for in the plaint with reference to the car which is the subject matter of the suit. The appeal is thus without any merit and we dismiss the same with costs.

There is a memorandum of cross objection filed by the plaintiff in the suit challenging the decree of the lower court to the extent the lower court has denied his costs in the suit. We find no merit in the cross objection also and that too is dismissed.