Nagarathinam Pillai vs K.K. Natesam Chettiar

Venugopal, J.—The second Defendant is the Appellant before this Court and the first Defendant is the Respondent. The Plaintiff is the wife

of the second Defendant and the first Defendant is the brother of the Plaintiff. The suit properties originally belonged to Kannammal the mother of

the Plaintiff and the first Defendant. The said Kannammal executed a settlement deed in favour of the Plaintiff, the second Defendant and her other

five daughters on 24th November, 1956. Subsequently, the first Defendant also obtained another settlement deed in his favour from his mother and

in pursuance thereof came into possession of the entire properties The Plaintiff filed Original Suit No. 342 of 1969 against the first Defendant

contending that the settlement deed executed by her mother in favour of the first Defendant is not valid in law and demanded partition and separate

possession of her 1/7th share in plaint items 1 to 11 and 1/14th share in plaint items 12 to 23. The other sisters of the Plaintiff were not impleaded,

as the first Defendant had obtained a release, dated 24th November, 1956 from his other sisters by paying them Rs. 2,000 each. The second

Defendant was impleaded in the suit as he was also entitled to a similar share in the suit properties. The second Defendant remained ex parte in the

suit. The first Defendant ultimately compromised the suit and a preliminary decree was passed declaring the Plaintiff''s title to 114th share in all the

suit items. The Plaintiff filed an application in Interlocutory Application No. 1472 of 1972 to pass a final decree and notice was ordered to the

Defendants At that stage, the second Defendant filed an application in Interlocutory Application No. 1903 of 1972 and sought allotment of his

1/14th share in the suit properties by paying the necessary Court-fees. Overruling the objections of the first Defendant, the trial Court passed a

final decree in favour of the Plaintiff and the second Defendant. On appeal by the first Defendant, the lower appellate Court held that passing of a

final decree straightaway in favour of the second Defendant without an amendment of the preliminary decree declaring his right in the suit properties

or a supplemental preliminary decree to that effect was not proper and the final decree passed by the trial Court was set aside and the matter was

remanded to the trial Court for fresh disposal after adjudicating the dispute regarding the right of the second Defendant to get a share in the suit

properties. After remand the second Defendant filed Interlocutory Application No. 1322 of 1974 to amend the preliminary decree declaring his

1/14th share in the suit properties and then pass a final decree in his favour in accordance with the amended preliminary decree. In that application,

the first Defendant filed a counter stating that the second Defendant received Rs. 1,500 from him and executed the Varthamanam letter, exhibit B-

1 disclaiming his interest in the suit properties and releasing his share in favour of the first Defendant, and he is entitled to claim relief u/s 53-A of

the Transfer of Property Act. The first Defendant also pleaded adverse possession. The claim of adverse possession was negatived by the trial

Court on the ground that the first Defendant is in possession only as a co-owner. The trial Court held that the varthamanam letter exhibit B-1 is a

true and genuine document and the first Defendant cannot claim protection u/s 53-A of the Transfer of Property Act as it can operate only as a

release deed and not a conveyance or contract of transfer between the parties and granted a preliminary decree in favour of the second Defendant

declaring his 1/14th share in the suit properties. On appeal, the lower appellate Court held that exhibit B-1 can be construed as a deed of

conveyance and since all the requirements of Section 53-A of the Transfer of Property Act are complied with, the first Defendant is entitled to

protection u/s 53-A of the Transfer of Property Act and on this finding the preliminary decree passed by the trial Court was set aside. Hence the

present second appeal by the second Defendant.

The learned Counsel for the second Defendant (Appellant) contended that under exhibit B-1 the second Defendant has merely released in

favour of the first Defendant the rights conferred on him under the settlement deed dated 24th November 1956 executed by his mother-in-law and

being a release deed extinguishing the rights of the second Defendant, it cannot operate as a conveyance and hence exhibit B-1 cannot be

construed as a contract of transfer of immovable property within the meaning of Section 53-A of the Transfer of Property Act. The Supreme

Court, in the decision reported in Kuppuswami Chettiar v. Arunugam Chettiar (1967) 2 M.L.J. 29 (S.C.) has held that a registered instrument

styled as a release deed releasing the right, title and interest of the executant in any property in favour of releasee for valuable consideration may

operate as a conveyance, if the document clearly discloses an intention to effect transfer and a release deed by using words of sufficient amplitude

can transfer title to one having no title before the transfer. A document though styled as a release deed can be construed as a deed of conveyance

if the words used therein ate of sufficient amplitude to show transfer of title to one having no title before the transfer and the operative words used

therein show a transfer of the right, title and interest of the executant in any property in favour of the releasee for valuable consideration. Then the

release deed can be construed as a deed of conveyance and a contract to transfer immovable property for consideration for purposes of Section

53-A of the Transfer of Property Act.

In the instant case, the rights conferred on the second Defendant by the settlement deed executed by his mother-in-law has been released by the

second Defendant in favour of the first Defendant under exhibit B-1 and the second Defendant has unequivocally stated that he has delivered

possession of the properties to the first Defendant and he or his heirs will have no claim over the properties. As the words used in exhibit B-1

show that there has been a release of the rights of the second Defendant in favour of the first Defendant by transferring his title and interest in the

suit properties which he has acquired under the settlement deed executed in his favour by his mother-in-law, there is a contract of transfer of

immovable property as contemplated u/s 53-A of the Transfer of Property Act. The learned Counsel for the second Defendant (Appellant)

contended that in the Supreme, Court case quoted above, the release was by a registered instrument and there could be no transfer of right, title

and interest under exhibit B-1 which is an unregistered document and hence there could be no transfer of right, title and interest under exhibit B-1

and as the contract relied on cannot be specifically enforced Section 53-A of the Transfer of Property Act will have no application.

The contention that Section 53-A or the Transfer of Property Act will have no application unless the contract relied on can be specifically

enforced, is to put the proposition in too broad and wide a manner. The object of this section it to protect persons in cases where there is a

contract which is inadmissible in evidence and cannot be enforced by filing a suit for specific performance. The contract contemplated in Section

53-A of the Transfer or Property Act must be a valid and completed contract and net a contract forbidden by law or based on negotiations which

had not been matured into a contract. As exhibit B-1 is a completed contract of transfer of immovable property for consideration valid in law, that

is sufficient to bring the case within the ambit of Section 53-A of the Transfer of Property Act and the question that it is an unregistered document

is not relevant for purpose of Section 53-A of the Transfer of Property Act.

The learned Counsel for the second Defendant (Appellant) next contended that the first Defendant continued in possession of the land and he

has not done any act in furtherance of the agreement for sale exhibit B-1 as required by the last Words of the second clause of Section 53-A of the

Transfer of Property Act and secondly the continued possession of the suit properties is not referable to exhibit B-1 and the requirements of

Section 53-A of the Transfer of Property Act are not satisfied. In Ma Thet v. Ma Se Mai AIR 1934 Rang. 304 the purchaser was already in

possession of the property as mortgagee and then continued in possession after the agreement to sell had been concluded and a portion of the

price was paid in addition to the amount already due on the mortgagee and it was held that such payment was an unequivocal act which could not

be referred to any matter other than the agreement for sale, and is sufficient to satisfy the requirement of Section 53-A of the Transfer of Property

Act, namely, that some act must be done in furtherance of the contract. In Mohanlal v. Prithvi Raj AIR 1954 Ajmer 70, it was pointed out that in

such cases the only act open to the mortgagee or the vendee may be the payment of the price particularly if he is already in possession and the

payment of the money is made in furtherance of the contract, there is no reason why it should not be treated as an act in furtherance of the

contract. This Court in Ananthoth Gopalan Vs. Eram Veettil Kanaran and Another, , has held that, if the payment is made under the document, the

payment of money can be treated as an act in furtherance of the contract within the requirements of Section 53-A of the Transfer of Property Act.

If the transferee is already in possession, in majority of cases the only act that can be performed by the transferee in pursuance of the contract is

acceptance of the money. If the money paid by the transferor is the price agreed Upon by the parties and if there is no indication to show that the

money has not been paid for any reason other than the contract, itself then the acceptance of the money by the transferee can be construed as an

act done in pursuance of the contract. As the payment by the transferor is an unequivocal act referable to the contract of transfer and the

acceptance of the money by the transferee, especially when it is not shown that the money was paid for any reason other than the contract itself, is

sufficient to satisfy the requirements of Section 53-A of the Transfer of Property Act, namely, some act done by the transferee in pursuance of the

contract. In the alternative, when the transferee is already in possession at the time of the contract, it must be shown from the contract itself or from

some other evidence that the continuance of his possession was in reference to or pursuant to the contract of sale. That can be treated as an act in

furtherance of the contract as required by the last words of second clause of Section 53-A.

In the present case, the acceptance of the sum of Rs. 1,500 specified under exhibit B-1 by the second Defendant is an unequivocal act referable

to the contract and that is sufficient to constitute some act done by the transferee for purpose of Section 53-A of the Transfer of Property Act. The

unequivocal recital in exhibit B-1 that the second Defendant is relinquishing all his interest in the suit properties and put the first Defendant in

possession of the suit properties is the clearest indication to show that the continued possession of the first Defendant was in reference and

pursuant to exhibit B-1.

To sum up, exhibit B-1 is a valid and completed contract. Under exhibit B-1, the second Defendant has contracted to transfer his right and

interest in the suit properties in favour of the first Defendant and it can operate as a deed of conveyance. The continued possession of the suit

properties by the first Defendant is in pursuance of exhibit B-1. The acceptance of the sum of Rs. 1,500 specified in exhibit B-1 by the second

Defendant is an act done by the second Defendant in pursuance of exhibit B-1. Thus, all the requirements of Section 53-A of the Transfer of

Property Act has been complied with and the first Defendant is entitled to the relief u/s 53-A of the Transfer of Property Act.

In the result, the judgment and decree of the lower appellate Court are confirmed and the second appeal fails and stands dismissed without

costs.