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Judgment
L. Narasimha Reddy, J.—Defendants 3, 4 and 5 in O.S. No. 192 of 1997 on the file of the Principal Junior Civil Judge, Tadepalligudem, are the appellants. For the sake of convenience, the parties are referred to, as arrayed in the suit.
The suit was filed by the sole plaintiff. He died during the pendency of the suit. His L.Rs. are brought on record as plaintiffs 2 to 8. It was filed for the relief of specific performance of an agreement of sale against 5 defendants : Defendant No. 1, Surampudi Laxmamma, mother of defendants 2 to 4, died during the pendency of the suit. The 2nd defendant also died within short time. Plaintiff pleaded that Suprampudi Venkata Ramakrishna Rao (for short ''the vendor''), husband of 1st defendant and father of defendants 2 to 5, who is also the brother-in-law of the plaintiff, represented to him that an extent of Acs. 2.25 cents of land in R.S. No. 460/2 of Chebrolu Village (for short ''the land''), owned by Sri Aduri Esnwara Chandra Vidyasagar, is under his cultivation and that the same is available for sale. Acting on that representation, the plaintiff is said to have agreed to purchase the land for a sum of Rs. 23,000/- and that an agreement of sale was executed by the vendor on 10-10-1984 Ex. A. 1 was executed between the parties. It was alleged that the possession of the land was delivered on the date of agreement itself, that the plaintiff entrusted the possession of the land to the vendor for cultivation and that the maktha was being paid year after year.
Stating that the owner of the land executed sale deed, Ex. B. 1, on 13-12-1994, in favour of the vendor, i.e. Venkata Krishna Rao, the plaintiff insisted that he is entitled for the relief of specific performance. He alleged that the vendor postponed the execution of the sale deed, on one pretext or the other, and ultimately, died in the year 1995. He further pleaded that the defendants, who succeeded to the property, continued to enjoy the same and in spite of repeated demands, they did not execute the sale deed.
The 1st defendant in the suit filed the written statement and it was adopted by the other defendants. She flatly denied the allegations made in the plaint. It was stated that as on the date of agreement of Ex. A. 1, one Mr. Korukonda Appa Rao, was the tenant in respect of the land, and the owners, by name Aduri Eshwarchandra Vidyasagar, his mother his wife-Nagamani and children executed sale deed Ex. B.1 in favour of the vendor, for a consideration of Rs. 93,400/- one decade thereafter, and possession was delivered at that time itself. She pleaded that her husband did not have any right, much less interest in respect of the land, as on 10-10-1984, when the agreement of sale is said to have been executed in favour of the 1st plaintiff. The defendants have also stated that the alleged agreement of sale is a fabricated one. Plea of limitation was also raised.
The trial Court decreed the suit through its judgment, dated 31-7-2006. Aggrieved thereby, the defendants 3 to 5 filed A.S. No. 24 of 2006, in the Court of Senior Civil Judge, Tadepalligudem. The appeal was dismissed, on 10-7-2008. Hence, this Second Appeal.
Sri J. Prabhakar, learned Counsel for the appellants (defendants 2 to 5) submits that the vendor did not have any right, title or interest in 1984 vis-a-vis the land, the plaintiff was aware of this, and that the question of the vendor agreeing to sell the land, does not arise. He submits that even to a naked eye, it is clear and evident that the various documents, such as the agreement, Ex. Al, letters said to have been written by the vendor, marked as Exs. A10 to A15 are all forged and still the suit was decreed. He submits that the recitals in the agreement of sale are self-contradictory and by themselves demonstrate that the agreement of sale is a rank forgery. Learned Counsel further submits that the suit was barred by limitation and it ought to have been rejected on that ground alone.
Sri Kowturi Vinay Kumar, learned Counsel for the respondents (plaintiff), on the other hand, submits that through cogent oral and documentary evidence, his clients proved the agreement of sale and that no interference is warranted with the concurrent findings of fact. Learned Counsel submits that even if there was any defect or deficiency in the title of the vendor, the subsequent accrual of title or rectification of the defect shall enure to the benefit of the plaintiff, as provided for under the Specific Relief Act. He submits that the suit was filed within limitation and the Courts below have analyzed the matter from the correct perspective.
The trial Court initially framed two issues for its consideration and subsequently, an additional issue was framed, as regards compensation towards rents from the land for the year 1996-97. The issues read as under:
i) Whether the late Surampudi Venkata Rama Krishna Rao executed agreement of sale dated 10-10-1984 in favour of plaintiff and received Rs. 23,000?
ii) Whether the plaintiff is entitled for specific performance?
Additional Issue:
i) Whether the plaintiffs are entitled to claim such amount of Rs. 30,000/- towards compensation of the produce for the years 1996 and 1997?
On behalf of the plaintiffs, PWs. 1 to 5 were examined and Exs. A.1 to A.16 were filed. Ex. A.1 is the agreement of sale and Ex. A.2 is the notice got issued by the plaintiff. Remaining documentary evidence comprised mostly of letters said to have been addressed by the vendor. On behalf of the defendants, DWs 1 to 3 were examined and Exs. B.1 to B.5 were filed. As mentioned earlier, the suit was decreed and the defendants filed the appeal. The lower Appellate Court framed the following points for its consideration:
i) Whether Ex. A-1 agreement of sale is true and valid?
ii) Whether the suit is barred by time?
iii) Whether the suit is bad for non-joinder of original owner of schedule property Aduri Eswarchandra Vidyasagar?
iv) Whether the plaintiffs are entitled for specific performance of Ex. A.-1 agreement of sale?
v) Whether the plaintiffs are entitled to claim any amount towards compensation for the years 1996 and 1997?
vi) Whether the impugned decree and judgment of the trial Court is sustainable or not?
Almost all the points were answered in favour of the plaintiffs and the appeal was dismissed.
Normally, this Court would be slow to interfere with the concurrent judgments rendered by the trial Court and the lower Appellate Court, in civil proceedings. A very strong case is required to be made out by the appellants in a second appeal, and it is only when substantial questions of law exist, that the interference would be possible. This Court is of the view that several substantial questions of law arise for consideration in this Second Appeal.
The first is about the limitation. The suit is filed for specific performance of agreement of sale said to have been executed way back in the year 1984. The suit was filed in 1997 i.e. 12 years after the date of agreement. Two years before that, the vendor died. The limitation for filing of suits of this nature is three years from the date of refusal to perform the contract, as per Article 54 of the Schedule to the Limitation Act. The plaintiff stated that the refusal to execute sale deed occurred during the life time of the vendor. It is not as if the plaintiff was not aware of the whereabouts of the vendor and his legal representatives or that he was finding it difficult to correspond with them. The parties are closely related. The defendants raised a specific plea as to limitation. Therefore, the trial Court was under obligation to frame an issue on this.
Assuming that there was no specific plea as to limitation in the written statement, the trial Court is endowed with the duty to examine that question. Section 3 of the Limitation Act places an obligation upon it. Sub-section (1) thereof reads as under:
Bar of limitation:--subject to the provisions contained in Sections 4 to 24 (inclusive), every suit instituted, appeal preferred and application made after the prescribed period shall be dismissed, although limitation has not been set up as a defence.
No attempt was made by the trial Court to satisfy itself as to whether the suit was filed within limitation at all. It is no doubt true that the lower Appellate Court addressed that question. However, its approach to that question is somewhat defective. Even according to the averments in the plaint, the vendor was dodging the issue relating to execution of the sale deed. That was obviously several years prior to the date of filing of the suit. The plaintiff was under obligation to explain as to how the suit was filed within limitation. Absence of plea and proof of the facts, that have the effect of postponing the stating point of limitation must, invariably result in dismissal of the suit, when it is filed more than a decade from the date of agreement. Hence, the suit filed by the plaintiffs was barred by limitation.
The second substantial question of law is as to whether the vendor, who admittedly did not have any salable interest in the property, had the right and capacity to execute the agreement of sale in favour of the plaintiff and whether the plaintiff is entitled for the benefit u/s 13 of the Specific Relief Act (for short ''the SR Act''). There is a recital in Ex. A. 1, to the effect that the vendor is a cultivating tenant of the land. It is not even mentioned that he had any agreement of sale in his favour, much less title, in respect of the land. It is a settled principle of law that no man can convey a better title than what he has in a property. In the written statement, it was clearly mentioned that the vendor was not even a tenant of the land and that one Mr. Korukonda Appa Rao, was cultivating the land, as tenant of the land owner Mr. Adoni Eshwar Chandra Vidyasagar. This was not at all contradicted by the plaintiff.
Two provisions become relevant in this context: One is Section 13 of the SR Act. It reads,
Section 13 of SR Act: Right of purchaser or lessee against person with no title or imperfect title.--
(1) Where a person contracts to sell or let certain immovable property having no title or only an imperfect title, the purchaser or lessee subject to the other provisions of this Chapter, has the following rights, namely:
(a) if the vendor or lessor has subsequently to the contract acquired any interest in the property, the purchaser or lessee may compel him to make good the contract out of such interest;
(b) where the concurrence of other persons is necessary for validating the title, and they are bound to concur at the request of the vendor or lessor, the purchaser or lessee may compel him to procure such concurrence, and when a conveyance by other persons is necessary to validate the title and they are bound to convey at the request of the vendor or lessor, the purchaser or lessee may compel him to procure such conveyance;
(c) where the vendor professes to sell unencumbered property, but the property is mortgaged for an amount not exceeding the purchase money and the vendor has in fact only a right to redeem it, the purchaser may compel him to redeem the mortgage and to obtain a valid discharge, and, where necessary, also a conveyance from the mortgagee;
(d) where the vendor or lessor sues for specific performance of the contract and the suit is dismissed on the ground of his want of title or imperfect title, the defendant has a right to a return of his deposit, if any, with interest thereon, to his costs of the suit, and to a lien for such deposit, interest and costs on the interest, if any, of the vendor or lessor in the property which is the subject-matter of the contract.
(2) The provisions of Sub-section (1) shall also apply, as far as may be, to contracts for the sale or hire of movable property.
The lower appellate Court discussed this provision extensively, with reference to precedents, and extended the benefit thereof, to the plaintiff.
The other provision is Section 43 of the Transfer of Property Act (for short ''the TP Act''). It reads as under:
Section : Transfer by unauthorized person who subsequently acquired interest in property transferred:
Where a person fraudulently or erroneously represents that he is authorized to transfer certain immovable property, and professes to transfer such property for consideration, such transfer shall, at the option of the transferee, operate on any interest which the transferor may acquired in such property, at any time during which the contract of transfer subsists.
Nothing in this section shall impair the right of transferees in good faith for consideration without notice of the existence of the said option.
Both of them cover the cases where the vendor of an improvable property, who does not hold proper title, agrees to sell or transfers the property. While Section 13 of the SR Act operates in respect of a contract which is yet to give rise to transfer, Section 43 of the TP Act becomes relevant after the transfer is effected. Another point of distinction is that an element of fraud or erroneous representation must be pleaded and proved against a transferor, u/s 43, whereas the same is not necessary to enforce a right u/s 13 of the SR Act. The principle of equity and fairness is enshrined in Section 13 of the SR Act. Section 43 of the TP Act on the other hand, embodies the principle of "feeding the estoppel".
The principle of "feeding the estoppel" is explained by the Privy Council in Tilakdhari Lal v. Khedan Lal AIR 1921 PC 112, is as under:
If a man has no title whatever to property but grants it by a conveyance which in form would carry the legal estate, and he subsequently acquires an interest sufficient to satisfy the grant, the estate instantly passes.
The object underlying both the provisions is to protect the transferee under a contract or a concluded transaction from the consequences flowing from the defect in the title of the transferor, and to relieve from the rigor of the operation of the principle of law, that no man can transfer a better title than what he possesses. Another common feature of both the provisions is that, they become relevant only when the transferor acquires the title at a subsequent stage.
Except for certain niceties, the circumstances under which the principle underlying both the provisions gets attracted are similar. A party to a contract, or a transferee in a transaction can insist on the transferor to do the needful, in case the latter acquires the title, which he did not possess at the time of entering into the contract or effecting the transfer. Such a right emanates from the principle, that a party who has made the other to believe that he holds valid title, cannot keep to himself, the advantage of acquiring the title at a later point of time. This pre-supposes that the party claiming such a right was not aware of the defect in the title of his vendor.
Courts have recognized an exception to the extension of benefit u/s 43 of the TP Act. If the transferee was aware of the absence of, or defect in, the title of the transferor, vis-a-vis the property before the transaction has taken place, he cannot enforce the right conferred upon him u/s 43 of the Act. In Kisan Sitaram Ambekar v. Sitaram Tulsiram AIR 1951 Nag 241, the Nagpur High Court noted,
Para-23 : It has been settled by numerous decisions, which are collected by Sir Dinshah Mulla at pp. 209 and 210 of Edn. 3 of his Transfer of Property Act and by B.B. Mitra at p. 184 of the 9th Edn. of his book on the Act and is also suggested in Chandulal v. Raghunathdas 1942 NLJ 82 at p. 86, that Section 43 is a species of estoppel and so cannot be availed of by a person who knows the facts and was not misled, and, according to some of those decisions, it is necessary for the person wanting to take advantage of this section to plead and prove that he took the transfer in good faith believing in and being misled by the erroneous representations made by the transferor. I need not go as far as that, but it is evident that the questions of knowledge and belief are material and so the other side must be given a chance of raising these defences if and when Section 43 is pleaded.
In Ouseph Vs. Govindankutty Menon and Others, , the Kerala High Court explained the principle as under:
Para 2:... Section 43 is founded on the rule of estoppel and therefore in order to attract the principle of that section it is necessary to show that there has been an erroneous or fraudulent representation. If both parties are aware of the absence of or defect in the title of the transferor, that will not be a case where there is an erroneous representation. In such a case, there is no scope for applying the rule of estoppel embodied in Section 43 of the Transfer of Property Act. This principle has now been well settled, whatever might have been the conflict of views on this question earlier. The Supreme Court in the decision in Jumma Masjid v. Kodimaniandra Deviah AIR 1952 SC 847 has stated the principle governing such cases....
Almost same considerations become relevant in the context of extending the benefit u/s 13 of the SR Act. The lower appellate Court made extensive reference to Section 13 of the SR Act and sustained the decree. However, it lost sight of the fact that the plaintiff did not even plead that the vendor represented to him that he possesses valid title to the property.
The plaintiff was very much aware of the absence of title in the vendor, vis-a-vis the land. In fact, the pleadings in plaint make this clear beyond any doubt. Once he has chosen to transact with the vendor, knowing fully well that the latter did not hold title to the land, he cannot seek enforcement of an agreement. The subsequent acquisition of title by the vendor, therefore, does not enure to the benefit of the plaintiff.
Apart from the questions of law, mentioned above, there are several aspects, which remain unexplained by the Courts below. Before the trial Court, bunch of papers, said to be containing the signature of the vendor, was filed. Even to a naked eye, it becomes clear that signature on the one does not tally with the other, not in minute details, but on broad features also.
A glaring anomaly is that Ex. A1 is said to have been executed at Khammam, and it evidences, delivery of possession of land in West Godavari District. Further, the possession of the land is said to have been redelivered to the vendor for cultivation. An attempt was made to depict the vendor as the tenant of the plaintiff. Not a semblance of evidence was adduced, to show that the rent was paid at any point of time.
Even where a suit is filed within limitation, and a case is made out for specific performance, relief of specific performance cannot be granted as a matter of course. The SR Act itself makes it clear that such relief is discretionary. At the same time, the discretion needs to be exercised in an objective manner. Time and again, the Hon''ble Supreme Court held that the escalation of prices between the date of agreement and the date of judgment in the suit, the conduct or bona fides of plaintiff in a suit filed for relief, are factors, to be taken into account. Viewed from any angle, the judgments rendered by the lower Appellate Court cannot be sustained in law.
The Second Appeal is accordingly allowed, and the judgments under appeal are set aside. There shall be no order as to costs.