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Judgment
Panchapakesa Ayyar, J.—This is a second appeal by one Mary Joseph, the plaintiff in O. S. No. 178 of 1952 on the file of the District
Munsif of Periyakulam, against the judgment and decree of the Subordinate Judge of Dindigul reversing the judgment and decree of the District
Munsif and allowing the appeal and dismissing the plaintiff''s suit with costs throughout.
Krishnaswami Nayudu J. before whom this second appeal came up for hearing in the first instance, referred it to a Bench, as he considered that
Horwill J. in In Re: Subban Samban, had taken the view that u/s 27(b) of the Specific Relief Act, the phrase ''''Transferee for value who has paid
his money in good faith"" must have paid at least a portion of the consideration in the shape of money and that, otherwise, he could not take
advantage of Section 27(b). As he considered that an important question of law as to the interpretation of the clause ""paid his money in good faith
u/s 27(b) has to be decided in this second appeal, he referred it to a Bench. That is how this second appeal has come before us.
We have perused the records and heard the learned counsel on both sides. The facts were briefly these. The plaintiff, Mary Joseph, had sold a
coffee estate measuring 5 acres 74 cents for a thousand rupees to the first defendant, Gurr alias Gurusami Chettiar, on 11-4-1947 under Ex. B. 2.
There was an agreement, A. 2 executed the same day by the first defendant to reconvey the property at the end of five years, paying back the one
thousand rupees together with interest at 16 1/2 per cent per annum, that is, Rs. 1825 minus the four hundred rupees directed to be paid to the first
defendant by P. W. 3 the lessee, plaintiff for the unexpired portion of the lease towards the rent due by him to the Ex. A 1 dated 27-10-1946 he
had taken from the plaintiff for 5 years.
We may add here that P. W. 3 admittedly paid the balance of Rs. 400 due under the lease Ex. A 1 to the first defendant''s father, Arunachala
Chettiar, and took a receipt, Ex. A. 3, from him on 29-8-1947, and handed it over to the plaintiff. The first defendant, who had stood guarantee
for the purchase of cloth from the second defendant''s shop, in Madurai, by his father-in-law executed a sale deed. Ex. B. 4, on 15-12-1950, for
thousand rupees in part settlement of the money due by his father-in-law to the second defendant which he had guaranteed under Ex, B. 8 dated
22-2-1950. The second defendant was not proved to have had actual notice of the agreement Ex. A. 2 to reconvey the properties to the plaintiff.
The learned District Munsif held that he must be deemed to have bad constructive notice, because according to him if he had made enquiries he
would have found out that the possession of the property sold to him by the first defendant was not with the first defendant but was in the
possession of a lessee P. W. 3, and, if he had made further enquiries, he might have found out that there was an agreement to reconvey, under Ex.
A2. The learned Dist. Munsif also doubted the genuineness of the adjustment of the debt of one thousand rupees under Ex. 33. 4, and considered
that there was no satisfactory proof of such adjustment which story he considered to be fishy.
He also doubted whether Section 27(b) of the Specific Relief Act would help the second defendant in the circumstances of the case. Obviously, if
the second defendant had constructive notice of Ex. A. 2 the agreement to reconvey, Section 27(b) would not help him at all. The learned District
Munsif decreed the suit in favour of the plaintiff with costs.
We may add here that the lessee, P. W. 3, had got his lease extended for five months from its expiry date, from the plaintiff, and had on the expiry
of the extended lease, handed over the property to the plaintiff, though the plaintiff had not got back his title to it under the agreement to reconvey,
or in any other manner. The plaintiff had, after obtaining such a collusive possession, filed this suit for specific performance of the agreement to
reconvey, Ex. A. 2, depositing Rs. 1425 in court. The first defendant had remained ex parte, as usually happens with such individuals in such
cases.
The second defendant took the matter in appeal. The Subordinate Judge of Dindigul allowed the appeal with costs throughout, holding that the
second defendant was not proved to have had constructive notice of the agreement to reconvey, Ex. A. 2, as wrongly held by the District Munsif.
Hence this second appeal.
Mr. T. P. Gopalkrishnan, learned counsel for the appellant, raised two contentions. The first was that the second defendant was rightly held by
the trial court to have had constructive notice of Ex. A. 2 the agreement to reconvey. His argument was that if the second defendant had made
some enquiries he would have found out that his vendor, the first defendant, was not in possession of the property and that the lessee, P. W. 3,
was in possession, and that if he bad enquired further he would have found out that there was an agreement to reconvey Ex. A. 2. The argument is
unconvincing. Even if the second defendant had made proper enquiries to the extent the law requires him to make, he would have merely found
that the lessee, P. W. 3, was in possession, because his lease had not expired by the date of Ex. B. 4, he knew that the lessee P. W. 3 had agreed
to pay the balance of the lease amount, namely, four Hundred rupees to the first defendant and had thus practically attorned to the first defendant.
Indeed it is admitted by Mr. Gopalakrishnan that the lessee, P. W. 3, paid the rent for the un-expired portion of the lease, namely, Rs. 400, to the
first defendant, and took a receipt from him and handed it over to the plaintiff, as he had taken the lease from the plaintiff and had to satisfy him that
he had paid Rs. 400 balance to the vendee, defendant, as agreed on between him and the plaintiff. So, such enquiries as the Jaw required the
second defendant to make would not have led him to any suspicion regarding the first defendant''s title to sell the property, much less given him any
notice of Ex. A. 2, the alleged agreement to reconvey.
Then Mr. Gopalakrishnan argued that, even so, and even granting that the second defendant had neither actual nor constructive notice of the
agreement to reconvey still as the second defendant had not paid one thousand rupees, the consideration under Ex. B. 4, in money, but only by
adjustment of a debt he could not claim the benefit of Section 27(b) of the Specific Relief Act. He relied on three rulings for this contention,
namely, the Bench ruling in Gudur Ranga Reddi, died, and Others Vs. Gundala Pitchi Reddi and Another, , the ruling of Varadachariar J. in
Arunachala Thevan Vs. Madappa Thevar and Others, and the ruling of Horwill J. in In Re: Subban Samban, . But, on a perusal of the rulings, we
do not find that any of them has held that the payment must have been in money, in whole or in part, in order to get the advantage of Section 27(b)
of the Specific Relief Act.
Even Horwill J. has not held to that effect, as mentioned by oversight by Krishnaswami Nayudu J. Mr. Gopalakrishnan was unable to point out to
us any passage in any of the three judgments holding such an extreme and extraordinary view. Indeed, it will be surprising if in modern times, when
courts are courts of justice, equity and good conscience, such a medieval notion, so contrary to justice and equity, as counting money, i. e., paying
in such or currency notes alone, being valid for the purpose of Section 27(b) is to be upheld.
All the three rulings relied on by Mr. Gopalakrishnan refused the benefit of Section 27(b) to the purchaser because he had notice of the prior
agreement before registration. We hold that the phrase ""paid his money"" means paid money or money''s worth and would include payment in cash
or currency notes, or gold and that Section 27(b) can be taken advantage of in all those cases. So, this contention also fails. This second appeal
deserves to be and is hereby dismissed but in the circumstances without costs. Leave refused.