Raghu Nath vs Mansa and Another

Dua, J.—This second appeal has arisen in the following circumstances. Rattan Singh defendant No. 1 was owner of one-third share in 33 Bighas 18 Biswas of land situated in village Sisana. Some land had been mortgaged in favour of Suba Singh and others including Mansa plaintiff (who is a respondent in this Court) for a sum of Rs. 2,250/-; the plaintiff''s mortgage money being Rs. 600/-. On 7th January 1950 Rattan Singh executed a sale-deed in respect of the land in favour of the plaintiff for Rs. 2,500/. The sale-deed was duly registered. The mortgage amount of Rs. 600/- due to the plaintiff was adjusted in the sale price, and a sum of Rs. 1,650/- was left with the plaintiff for payment to the previous mortgagees. Rs. 140/- were paid before the Sub-Registrar and Rs. 110/- were given by the plaintiff for the expenses of the execution of the deed etc. Mutation on the basis of the sale-deed was entered on 12th March 1950, but the same was rejected on 19th September the same year. Later Rattan Singh was allotted the land described in para 4 of the plaint in lieu of the land referred to above. His mortgages were given separate pieces of land for possession in their capacity as mortgagees, while the land described in clause F of para 4 of the plaint was allotted to Rattan Singh as unencumbered. The plaintiff, Mansa, and Mst. Mari were holders of the remaining two-third share in the land in equal shares before consolidation. Mst. Mari is said to have died about five years ago and her share in the land is said to have devolved upon Mansa plaintiff and Rattan Snigh in equal shares. Thereafter, Rattan Singh executed a sale-deed in favour of Raghunath defendant No. 2 for Rs. 10,000/- in respect of the land inherited by him from Mst. Mari and the land described in para 4 of the plaint excluding the land described in clause D. This sale-deed is dated the 16th January 1956 and the document was duly registered. On knowing of this transaction Mansa plaintiff approached the revenue authorities regarding mutation of the sale in his favour. By means of an order dated the 14th August 1956 the Collector directed the previous mutation order dated the 19th September 1950 to be reviewed. The Mutation Officer upheld the previous mutation order and the appeal preferred against that order by the plaintiff was rejected by the Collector on the 10th May 1957. On 20th August 1958 the plaintiff instituted the present suit for a declaration that he had acquired ownership of the suit land by the sale-deed dated the 7th January 1950, and that the sale-deed executed by Rattan Singh defendant No 1 in favour of Raghunath dated the 16th January 1956 was inoperative and ineffectual as against his rights of ownership. He also claimed possession of the land described in clause F of para 4 of the plaint on the allegation that Raghunath defendant was in possession without any title, and that the sale-deed dated the 16th January 1956 conferred no right or interest upon him. It was also averred that the sale-deed in favour of Raghunath defendant No. 2 was a fictitious document executed for the purpose of depriving the plaintiff of his right of ownership in the land.

Both the defendants denied the plaintiff''s claim and pleaded that the sale in plaintiff''s favour had been cancelled a few months afterwards and that thereafter the ''plaintiff had got the land comprised in Khasra No. 3452 as mortgagee from Rattan Singh by means of a mutation attested on 26th August 1951 and therefore the plaintiff had only mortgagee rights in the land mortgaged with him without any rights of ownership in the remaining land. Raghunath also pleaded bona fide character of his purchase which deserved protection u/s 41 of the Transfer of Property Act.

On the pleadings the trial Court framed the following issues:-

Whether defendant No. 1 sold the land as mentioned in paragraph 1 of the plaint in favour of the plaintiff vide registered deed dated 7th January 1950?

Whether the plaintiff took 1 Bigha and 4 Biswas Pukhta land, a part of the land under sale and comprised by Khasra No. 3452, in mortgage from defendant No. 1 after the sale of the land in his favour? If yes, what is its effect?

In case of proof of issue No. 1, whether the plaintiff got the sale of the land as mentioned in paragraph 1 of the plaint cancelled? If yes, to what effect?

Whether the plaintiff is estopped from instituting the suit?

Whether defendant No. 2 is a bona fide purchaser of the land in dispute for consideration? If yes, to what effect?

Whether the suit is within time?

Relief.

The trial Court decreed the plaintiff''s suit. Issue No. 1 was decided by it in favour of the plaintiff. Exhibit P. 1, the sale deed in question was properly proved by the testimony of Amar Nath petition writer, Gohana P.W. 1 and indeed the factum of the sale was admitted by the defendants in their written-statement as well as in. their depositions in the witness-box. Issue Nos. 2, 3, and 4 were similarly decided in favour of the plaintiff and it was held that the plaintiff was the owner of the suit land at the time of its resale by defendant No. 1 in favour of defendant No. 2. Issue No. 5 also went in favour of the plaintiff. While discussing this issue, the learned Senior Subordinate Judge expressed a clear opinion that defendant No. 2 had knowingly purchased litigation by getting the sale deed executed in his favour in respect of his land sold earlier in favour of the plaintiff.

Raghu Nath went up in appeal to the Court of the District Judge but without any success. After considering all the relevant circumstances, the lower appellate Court repelled the contention that the sale in favour of the plaintiff had been cancelled and affirmed the conclusions of the trial Court. The appellate Court also rejected the defendant-appellant''s plea of being a bona fide purchaser. According to it, the information available to the appellant should have put him on his guard and if he had pursued the matter with reasonable care, he would have found that the sale in favour of the plaintiff had never been cancelled. The appeal was accordingly dismissed.

On second appeal Shri P.C. Jain has very ably put his client''s case and said all that could possibly be said in support of the appeal. He has laid emphasis on the mortgage of 1951 of Khasra No. 3452 and has contended that this had not been included in the sale-deed of 1950. The lower appellate Court has considered this matter and has accepted the explanation offered on behalf of the plaintiff that this was due to the Patwari''s mistake. Nothing has been shown as to why the conclusion of the learned District Judge on this point should be reversed on second appeal.

It was then contended that the sale in favour of the plaintiff had not been acted upon. This aspect, too, has been considered by the Court below and decision given in favour of the plaintiff. It has again not been shown as to how this conclusion can be challenged on second appeal.

The last argument is based on section 41, Transfer of Property Act, and very great stress has been laid on the contention that the Courts below have not considered all the relevant facts and circumstances while considering the applicability of this section. Arur Singh v. Mst. Santi AIR 1936 Lah 405 has been cited for the proposition that if a mortgagee does not get his mortgage entered in revenue papers and thus allows the mortgagor to remain ostensible owner, then he cannot question the subsequent transfer by the mortgagor. Chandi Prosad v. Gadadhar Singha AIR 1949 Cal 666 has been relied upon for the contention that the question, whether or not transferee took reasonable care to ascertain his transferor''s title, is a question of law and requires careful consideration. In the reported case, however, it is also observed that the District Judge there had not recorded a clear finding if the respondent had taken reasonable care to ascertain whether the transferor had power to make the transfer though, the Judge was apparently of the view that the respondent had taken such care. The High Court, after going into the evidence, formed the opinion that the transferee had not taken reasonable care that his transferor had the power to transfer. Reference has also been made before me to Khushalchand Bhagchand Vs. Trimbak Ramchandra and Others, for the view that under certain circumstances an examination of the revenue records coupled with the possession of the transferor may amount to sufficient enquiry. It has, however, also been observed there that this would not dispense with the duty to enquire from the Sub-Registrar''s office-a duty which has now been imposed upon everyone taking a transfer of immoveable property by Explanation 1 to section 3, Transfer of Property Act. Mul Raj v. Fazal Imam ILR 45 All 520 has also been referred to on behalf of the appellant in support of the appeal. On the facts and circumstances of the reported case a Division Bench of the Allahabad High Court allowed the first appeal holding that the plaintiff there was not entitled to recover the property, the case being covered by section 41 of the Transfer of Property Act.

On behalf of the respondents a Full Bench decision of the Lahore High Court in Shamsher Chand v. Bakhshi Mehar Chand AIR 1947 Lah 147 has been cited. It has been held there that though section 41, Transfer of Property Act, does not apply to the Punjab, the principles underlying this section have always been held applicable in the Province. Din Mohammad J., in the course of his judgment, observed that mere inactivity on the part of the real owner does not amount to an implied consent by him as contemplated by section 41. Mahajan J., as he then was, agreed with this observation. This remark was followed by a Bench of this Court in Gurbinder Singh v. Lal Singh AIR 1959 Punj 123. In the Lahore case there was a difference of opinion between Din Mohammad and Cornelius JJ on one side and Mahajan J. on the other as to whether reference to revenue records protects the transferee in the Punjab. According to the majority view, in the Punjab, where oral transfers were permitted by law, inspection of the record in the registration office could not be regarded as a sine qua non in relation to the grant of protection u/s 41, and, the facts and circumstances of each case should be looked into in order to determine whether reliance on the record of rights would afford sufficient protection to a transferee u/s 41. The decision in Arur Singh v. Mst. Santi AIR 1936 Lah 405 was approved by them. According to Mahajan J., however, the transferee must also search the register in the registration office to find out whether any transaction by means of a registered deed had been effected by the transferor. In Dwarka Das v. Rangi Lal (1953) P.L.R. 132 a Division Bench of this Court, while dealing with the case of land situated within the municipal limits of Sonepat, adopted the dissenting view of Mahajan J., as expressed in the Full Bench case, in preference to the majority view. It, however, appears that the question, whether or not the Full Bench decision was binding on the Division Bench, was not raised before the Court and therefore they did not advert to this aspect. The Bench however, also held the decision in Arur Singh''s case AIR 1936 Lah 405 not to be good law, though the majority view in the Full Bench decision has approved that decision.

Reference has been made to a decision of the Patna High court in Bansidhar Seth v. Gopi Lal Seth AIR 1940 Pat 480 which is an authority for the proposition that the question, whether transferee has exercised due care and caution within the meaning of section 41, is a question of fact and cannot be interfered with on second appeal. For this proposition reference has also been made to Jamna Das v. Uma Shankar I.L. 36 All. 308. As a matter of fact, Bhide J. has also expressed the same view in Jhanda Singh v. Receiver, Insolvents'' Estate, Amritsar AIR 1935 Lah. 412. Assistance has also been sought from a Supreme Court decision in Paras Nath v. Mohani Dasi AIR 1959 S.C. 1204.

It is desirable here to examine as to what are the essential requisites for attracting the principle underlying section 41 of the Transfer of Property Act. This section is in the following terms:-

Where with the consent, express or implied, of the persons interested in immovable property, a person is the ostensible owner of such property, and transfers the same for consideration, the transfer shall not be voidable on the ground that the transferor was not authorised to make it; provided that the transferee, after taking reasonable care to ascertain that the transferor had power to make the transfer, has acted in good faith.

The rule embodied in this section appears to me to be an exception to the recognised principle of law that no man can transfer to another a right or title greater than what he himself possesses. The same principle of law is expressed by the maxim:-

He gives not who hath not.

The exception embodied in section 41, is, as its language shows, a form of equitable doctrine of estoppel. It is not a new rule of law but an already existing equitable rule raised to the status of the statutory mandate in the territories where the Transfer of Property Act is in force. In other places applicability of the principle embodied in this section still depends on considerations of justice, equity and good conscience.

Now to attract the rule of estoppel contained in this section it must be shown, inter alia, that the ostensible owner has been enabled to possess the indicia of ownership by the express or implied consent of the real owner, and further that the transferee has, after taking reasonable care to ascertain that the transferor has the power to make the transfer, acted in good faith. As observed by this Court in Gurbinder Singh''s case AIR 1959 Punj 123, mere inactivity on the part of the person interested without something more is not enough, though, in my opinion, in certain circumstances where activity is called for, inactivity may legimately amount to the requisite representation attracting the doctrine of estoppel embodied in the section in question. As a matter of fact, human activities are so varied and unpredictable that it must always remain a question to be determined in the circumstances of each case as to whether or not inactivity on the part of the person interested attracts the rule of estoppel contained in section 41. It is neither profitable nor possible to lay down or state for future guidance with precision what circumstances would invite the protection provided by the rule in question. I must, however, also point out that the transferee must, in addition, act in good faith after taking reasonable care about his transferor''s power to transfer.

Let me now consider the case in hand in the light of the foregoing discussion. It is clear from the trial Court''s judgment that the appellant had been informed of the existence of a registered sale-deed in favour of the plaintiff though he also got the information that mutation of the sale had been rejected. On getting this information, reasonably speaking, the appellant should have probed the matter further to see that his transferor had in law the power to make the necessary transfer. Both Courts below have held that the appellant did not act in a manner which would attract the equitable rule underlying section 41. The findings of fact that the appellant knew of the existence of the registered sale-deed, cannot be assailed on second appeal and if this finding is upheld, in my opinion the conclusions of the Courts below that he is not entitled to the benefit of section 41 can hardly be successfully assailed. Without expressing any considered opinion as to in what circumstances a Court of second appeal would be justified in interfering with a decision. On the applicability of section 41, I have no hesitation in holding that on the facts mentioned above there is no good ground for interference in the present case.

This appeal thus fails and is dismissed but with no order as to costs in this Court.