P. Ramasamy vs V. Radhakrishnan

P. Devadass, J.—Plaintiff is the Appellant. Originally, the Suit in O.S. No. 343 of 1992, was filed in the Sub-Court, Dindigul. In the Suit,

Plaintiff sought for return of his advance money Rs. 50,000/- from the Defendants/Respondents.

Later, the Suit was transferred to the Sub-Court, Palani and became O.S. No. 23 of 1996. The Suit was decreed with future interest @ 6%

p.a. against all the Defendants.

In A.S. No. 71 of 2000, in the Principal District Court, Dindigul, 3rd Defendant challenged the decree. It was allowed. The 3rd Defendant had

gone out of the decree. In the circumstances, Plaintiff filed this Second Appeal against him.

Admittedly, at one point of time, Chinnadurai/First Defendant owned the property situate in Palani. On 29.6.1989, under Ex. A2-Sale

Agreement, his wife Seethalakshmi/Second Defendant, as his power of agent [Ex. A1-Power Deed, dated 23.6.1989] had agreed to sell the

property to the Plaintiff for Rs. 2,50,000/- and under the Sale Agreement she had received Rs. 50,000/- as advance. Admittedly, the Sale

Agreement did not fructify into a Sale Deed. But, Plaintiffs advance money remained with the 1st Defendant.

In the circumstances, Plaintiff filed O.S. No. 343 of 1992, claiming his advance money as against Chinnadurai (First Defendant) and his wife

(Second Defendant). Since the First Defendant had passed away, his legal heirs were brought on record as Defendants 4 to 9. 3rd Defendant had

purchased the property. Due to certain subsequent developments, he became 3rd Defendant in the Suit. In her Written Statement, 2nd Defendant

did not deny her receipt of Rs. 50,000/-. However, a compromise i.e., under Ex. B-3 dated 3.3.1994, stated to have been effected between 2nd

& 3rd Defendants, whereunder 3rd Defendant had agreed to settle the amounts due to the Plaintiff. But, 3rd Defendant took the stand that Plaintiff

is not a party to Ex. B-3, Plaintiff cannot seek the amount from him and he is not legally bound to pay the amount to the Plaintiff.

While the Suit was pending in the Sub-Court, Dindigul, it was decreed ex parte. In execution of the decree, in E.P. No. 115 of 1992, the

property was attached. It was also registered with the concerned Sub-Registrar''s office (see Ex. A5). It has become an encumbrance (see Ex.

A4-Encumbrance Certificate) on the property. In the circumstances, the Trial Court/Sub-Court, Palani decreed the Suit as prayed for against all

the Defendants. Except 3rd Defendant, the other Defendants kept quite.

The 3rd Defendant took the matter in Appeal in A.S. No. 71 of 2000 to the District Court, Dindigul. The First Appellate Court after coming to

the conclusion that Ex. B.3, compromise arrangement has not been proved allowed the Appeal, thus, the Suit was dismissed as against Third

Defendant. That is how, now, the Plaintiff is before us as against the Third Defendant.

In the Second Appeal, the following substantial question of law is framed:

Whether the First Appellate Court was correct in ignoring the Third Defendant from the liability in respect of the Suit claim when he had purchased

the property in question covered under the agreement pending Suit and that too after the order of attachment passed by the Trial Court.

Question of 3rd Defendant''s liability centres around the attachment ordered by the Sub-Court, Dindigul in execution of its decree and the

purchase of the property by the 3rd Defendant.

According to Mr. P. Athimoola Pandian, learned Counsel for the Appellant, the Respondent had purchased the property, while the attachment

order was in force, in other words, the charge over the property was in force, in such circumstances, the Respondent is bound to pay the amount.

The learned Counsel also referred to Section 55(6)(b) of the Transfer of Property Act, 1882 and would submit that the charge/burden over the

property was created by operation of law by a Court order. It will follow the property and also the person who purchases or dealt with the

property. In support of his submissions, he has cited Delhi Development Authority Vs. Skipper Construction Co. (P) Ltd. and Others,

On the other hand, Mr. S. Anand Chandrasekaran, learned Counsel for the Respondent would submit that the framing of the Suit itself will

answer as against the claim of the Appellant. The Suit has been filed not for enforcing the Sale Agreement. It is a simple Suit for return of advance

money. In such circumstances, the question of making the 3rd Defendant personally liable to pay the advance amount will not arise.

I have anxiously considered the rival submissions, gone through the evidence and the findings of the First Court as well as the next Court.

Late Chinnadurai was owner of the suit property situate in Palani, whose wife/Second Defendant as his empowered agent, had executed Ex.

A2-Sale Agreement in favour of Plaintiff and under the Agreement she had also received an advance of Rs. 50,000/- from the Plaintiff. But the sale

did not went through, so the Suit in O.S. No. 23 of 1996 was filed by the Plaintiff for the return of his advance money. A decree was passed, of

course, an ex parte decree, while executing the said decree, in E.P. No. 115 of 1992, attachment was ordered. It was registered with the Sub-

Registrar on 24.9.1992. This is also reflected in Ex. A4-Encumbrance Certificate.

The execution records (Ex. A.3) shows that on 8.4.1994, the Execution Petition was dismissed for non-payment of batta. Subsequently, the ex

parte decree was set aside.

It is not disputed that on 28.2.1994, the 3rd Defendant had purchased the property. So, while the Court attachment made with reference to

said particular property was in force, the 3rd Defendant had purchased the property.

Now, what is the effect of it? What are its legal consequences upon subsequent purchaser (3rd Defendant).

Admittedly, the property was purchased by the 3rd Defendant/Respondent at a time when attachment was in force and in other words, a

charge over the property was in force. Registration of the Court attachment order is a public notice to one and all. A transaction or activity

connected to an immovable property of value of Rs. 100 upwards is required by law to be registered. On registration, everyone in the world is

presumed to have public notice of the same. That he did not know of such registration will be of no avail. In other words, by operation of law,

everyone will be imputed with the knowledge of an encumbrance having been created over the property.

Section 55(6)(b) of the Transfer of Property Act also deals with buyer''s charge over the property for the return of his purchase money.

In Delhi Development Authority Vs. Skipper Construction Co. (P) Ltd. and Others, , with reference to Section 55(6)(b) of the Transfer of

Property Act, 1882, the Honourable Apex Court held as under:

It is plain from the above provisions that in the absence of a contract to the contrary, the buyer will have a charge on the seller''s interest in the

property which is the subject matter of the Sale Agreement in so far as the purchase money and interest on such amount are concerned, unless the

buyer has improperly declined to accept delivery. The charge is available against the seller and all persons claiming under him. The charge is

available against the seller and all persons claiming under him. This charge in favour of buyer is the converse of the seller''s charge u/s 55(4)(b). The

buyer''s charge under the Section is a statutory charge and differs from a contractual charge which a buyer may be entitled to claim under a

separate contract.

Mulla, in his commentaries, on Transfer of Property Act, 1882, 8th edition, at page 411, comments that the charge on the property u/s 55(6)

(b) is enforceable not only against the seller but, against all persons claiming under him.

Since the property was purchased by the 3rd Defendant while the Court attachment was in force, the 3rd Defendant has been impleaded in the

Suit. In the circumstances, the Trial Court has rightly imposed the liability on the 3rd Defendant to discharge the said burden, that is, pay the

advance amount to the Plaintiff.

This position of law will not change, even if the Suit is filed for return of advance money.

In the circumstances, in view of our above deliberations, the answer to the substantial question of law goes in favour of the Appellant.

Consequently, the First Appellate Court''s decree is required to be unseated. In the result, this Second Appeal is allowed, the decree and

judgment, dated 20.8.2003 of the Principal District Court, Dindigul passed in A.S. No. 71 of 2000 is vacated and the Trial Court''s decree is

restored. In the facts and circumstances, the parties will bear their respective costs in this Appeal. Consequently, the connected Miscellaneous

Petition is closed.