The Judgment of the Court was delivered by
B.P Singh, J.:— This Second Appeal has been preferred by defendant No. 1 arising out of the suit filed by respondent-plaintiff for declaration of title and possession in respect of suit lands as also damages for the cutting of the Tamarind tree by defendant No. 1. The trial Court as well as the Appellate Court have concurrently found in favour of the plaintiff and decreed the suit. Aggrieved by the Judgment and decree passed by the Appellate Court, namely, the Court of Principal Civil Judge, Kolar, dated 7-1-1980 in Regular Appeal No. 23/1978, this appeal has been preferred.
2. The facts of the case may be briefly noticed:
The plaintiff was admittedly the mother-in-law of defendant No. 2. Defendant No. 1 is a purchaser from defendant No. 2 of the suit lands.
The case of the plaintiff is that her husband was an Engine Driver and she used to reside with him. By a registered Sale Deed, dated 29th March, 1936, the plaintiff acquired title to the suit lands in consideration of her mehr dues. She was in peaceful possession and enjoyment of the same. Her son was also employed, and therefore for the management of the said property, she entrusted the same to defendant No. 2, who was the husband of her daughter Zeenathunnisa. Defendant No. 2 managed the properties and paid the rentals etc., out of the produce. Since, 1946 the plaintiff has been staying with her son at Arakonam. In the year 1953 defendant No. 2 also left for Bangalore.
Her case is that in the year 1968 when her son went to pay rent for the suit land, the Patel refused to accept the rent on the ground that suit lands were recorded in the name of the plaintiff. Her son made enquiries from the Taluk Office and the records disclosed that the Patta in respect of the suit land was in the name of defendant No. 2. The plaintiff wrote to the authorities that recording of the name of defendant No. 2 against the suit land in the revenue records was brought about by fraudulent means by defendant No. 2 since she was the owner of the property. Since the plaintiff was an old lady unable to look after herself and she had also sustained a fracture recently, she appointed her son as her power of attorney to look after her affairs. It is the plaintiff's case that she never consented to the transfer of her interest in the suit lands in favour of defendant No. 2, her son-in-law and the entry in the revenue records were got made by defendant No. 2 by fraudulent means. She had never executed any registered document transferring her interest in favour of defendant No. 2. She also came to know that defendant No. 2 had sold the suit land to defendant No. 1 - appellant herein. It was submitted that the said sale was illegal and void and conferred no title upon defendant No. 1. This sale admittedly took place on 27th August, 1969, and the Sale Deed has been marked as Ex. D-4. Her further grievance in the plaint was that defendant No. 1 had cut the Tamarind tree and had caused loss to her. She therefore, claimed damages to the tune of Rs. 1,500/- for cutting of the tree. On these averments, it was prayed that the Court may be pleased to pass a decree declaring her title to the suit lands and for recovery of possession of the same. In addition, the Court may pass a decree for damages against defendant No. 1 for cutting of the tamarind tree.
3. Defendant No. 1 filed a written statement stating that the plea of the plaintiff was wrong. She was never in possession of the suit lands. It was his case that the plaintiff herself gave a written application to the Tahsildar, Bangarpet, relinquishing her rights in the suit lands. In view of the application made by the plaintiff herself, defendant No. 2 was recorded in the revenue records as the owner of the suit land. He was therefore the ostensible owner of the suit land and this was to the knowledge of the plaintiff. It was further pleaded that defendant No. 2 had with him all the documents of title. When defendant No. 2 offered to him the suit lands for sale, he made reasonable enquiries, acted in good faith and agreed to purchase the property for a consideration of Rs. 6,000/-. Ultimately, a registered Sale Deed was executed on 27th of August, 1969. It was the case of defendant No. 1 that the sale deed was executed with the consent of the plaintiff. After execution of the Sale Deed, defendant No. 1 was put in possession of the suit lands.
His grievance was that after the death of the wife of defendant No. 2, who was the daughter of the plaintiff, the plaintiff's son, who secured from her a power of attorney to look after her properties was now trying to grab the suit lands. In any event, it was averred that the suit was barred by limitation. Cutting of the tamarind tree was denied. It was further pleaded that in any event, defendant No. 1 being a bonafide purchaser for valuable consideration from an ostensible owner not having notice of the real owner, was protected under Section 41 of the Transfer of Property Act and therefore, no decree could be passed against him.
4. Defendant No. 2 filed the written statement separately stating that the plaintiff was his mother-in-law and originally she had title to the suit lands having acquired the same under a registered Deed of Sale in lieu of Mehr dues. He, however, denied that the plaintiff was in possession of the lands in question, and that she used to get the lands cultivated and for that purpose, used to visit the suit land in the company of Defendant No. 2. He denied that by fraudulent means he had got his name included in the record of rights in respect of the suit lands. According to him, the plaintiff herself relinquished all her interest in his favour by conduct and documents. According to him, this was done by plaintiff out of love and affection for defendant No. 2. This plea, regarding relinquishment of her interest in favour of defendant No. 2 was incorporated by an amendment of the written statement filed on behalf of defendant No. 2 for which, he had made an application on 25-8-1976. In the written statement, defendant No. 2 had also pleaded that about 20 years ago, the plaintiff had gifted the suit lands to him by way of Hiba-bil-ewaz followed by delivery of possession for a consideration of Rs. 90/-. After the aforesaid Hiba-bil-ewaz the second defendant was in possession and enjoyment of the suit lands in his own right. He was therefore paying rent for the suit lands in his own right. The relinquishment in favour of defendant No. 2 was made by the plaintiff herself by addressing a letter to the Amildar of Bangarpet. It was further his case that he had mortgaged the suit land in favour of a Society to secure a loan, which he later redeemed. It was asserted that he enjoyed the suit land as owner thereof adverse to the interest of the plaintiff. It was then stated that he had sold the suit land to the first defendant for a sum of Rs. 6,000/- with her implied consent.
5. As observed earlier, the trial Court decreed the suit finding in favour of the plaintiff on all the issues. The Judgment of the trial Court has been affirmed in appeal by the first Appellate Court. The first Appellate Court found that the suit was not barred by limitation as it was governed by Article 65 of the Limitation Act and not Article 58 as contended by defendant. It held that the suit was not a suit for mere declaration, but a suit for declaration of title coupled with delivery of possession. It also held that the Court fee paid was sufficient.
It examined the case set up by defendants that the plaintiff had gifted the suit land to defendant No. 2 by Hiba-bil-ewaz and that defendant No. 2 had paid a sum of Rs. 90/- by way of consideration. It appears a little incongruous that the plea of defendant No. 2 was to the effect that he acquired the suit land by virtue of Hiba-bil-ewaz, meaning thereby by an oral gift coupled with delivery of possession, while at the same time, he contended that he paid a sum of Rs. 90/- to his mother-in-law. That however, does not affect the result of the case. The defendants examined D.Ws 1, 3 and 4 on this point. The Appellate Court observed that there was no documentary evidence to support the story of Hiba-bil-ewaz. It further, held that Ex. D-1, the request made by the plaintiff in Form No. 4 for relinquishment of her interest in favour of defendant No. 2, belied the plea of the second defendant that in the year 1947 or 1948 the plaintiff had gifted the suit land to him. The recitals in Ex. D.1 clearly indicated that the transfer of occupancy was from the date of Ex. D.1 i.e, 16th February 1960. The Appellate Court, therefore, found that if the plaintiff purported to transfer her interest in the suit land under Ex. D.1 on 16-2-1960, the theory that in the year 1947-1948 she had gifted the same suit land to her son-in-law defendant No. 2 cannot be accepted and therefore the story of Hiba-bil-ewaz was rendered improbable.
6. The Appellate Court also considered the evidence on record, documentary as well as oral, and held that the plea of the second defendant that the suit land was conveyed to him by the plaintiff in or about 1948-1949 by way of Hiba-bil-ewaz was only an after-thought and not true. It was further held that the second defendant had not acquired title by adverse possession because the evidence disclosed that the plaintiff came to know about the second defendant dealing with the suit lands as his own only in or about the year 1968. The suit was instituted in the year 1971. Thus, it was within 12 years, both from the date of Ex. D.1 as also from the point of time when the plaintiff came to know about the defendant No. 2 dealing with the property as his own.
On the question of ostensible ownership of the suit lands, the Appellate Court held that defendant No. 1 was not entitled to the protection of Section 41 of Transfer of Property Act. It found that the first defendant admitted that he knew the family of the second defendant for twenty four years and had money lending transactions with the second defendant. The Court held that it was reasonable to think that the first defendant knew the relationship between the plaintiff and the second defendant. It also held that the patta was not a document of title and that by itself could not establish that the second defendant was an ostensible owner of the suit land. He further, held that the first defendant made enquiries before he purchased the suit land from the second defendant, but his evidence did not disclose what enquiries he made to satisfy himself that the second defendant had power to convey the suit land, and was its owner. There was no document evidencing that the plaintiff had conveyed the suit land to the second defendant, obviously because he claimed it under Hiba-bil-ewaz. He further considered the fact that the copy of Ex. D.1 was obtained in May 1967. The agreement to sell Ex. D.5 was however executed on 30th August, 1966, even prior to the date on which a copy of Ex. D.1 was obtained by defendant No. 1. The sale deed was actually executed later, on 27-8-1969. The Appellate Court, therefore, held that if really the first defendant had exercised reasonable care and made enquiries he would have certainly come to know that the second defendant had not acquired title to the suit land and he was only a manager of the suit land. The Appellate Court has considered the evidence on record in this connection and has taken into account the fact that the land revenue receipts had not been produced which could have shown in whose name land revenue was being paid. He, therefore, held that defendant No. 1 had not discharged the onus upon him to show that he had taken due care to ascertain the real ownership of the lands in suit and that he had acted in good faith.
In view of the above findings, the appeal was dismissed.
7. The learned Counsel for the appellant urged before me two submissions:—
The first submission was that the suit filed by the plaintiff was barred by limitation. The suit was governed by Article 58 and not by Article 65 of the Limitation Act.
Second submission urged before me was that in the facts and circumstances of the case, defendant No. 1 was entitled to the protection of Section 41 of the Transfer of Property Act, he being bonafide purchaser for value without notice.
So far as the first submission is concerned, it proceeds on the assumption that the suit was merely a suit for declaration of title and nothing else. It is not possible to accept this submission. In the plaint, the plaintiff has stated the manner in which she acquired title to the suit lands. She then stated the facts about the necessity to appoint her son-in-law - defendant No. 2 as her manager to look after her properties. She has then stated about the manner in which defendant No. 2 dealt with her properties and ultimately her knowledge about the fact that defendant No. 2 had got a patta made in his own name in respect of the suit lands and his selling the suit lands to defendant No. 1. On such pleadings, the plaintiff claimed not merely a declaration that she was the owner of the property and that the sale deed executed by the 2nd defendant in favour of the first defendant was void, but also a relief for possession of the suit lands and damages amounting to Rs. 1,500/- from defendant No. 1, who, it was alleged, had cut a standing Tamarind tree on the land in question. To me it is obvious that such a suit where possession is claimed as a consequence of the declaration, would be governed by Article 65 and not Article 58 of the Limitation Act. The first submission must therefore be rejected.
The second submission must also be rejected. Section 41 of the Transfer of Property Act is in the nature of an exception to the Rule that a person cannot confer better title than he has. The Section provides that a transfer shall not be avoidable on the ground that the transferor was not authorised to make it where, with the consent express or implied of the real owner, the transferor is the ostensible owner of such property and transfers the same for consideration. The Section obliges the transferee in all such cases to make reasonable enquiries to ascertain that the transferor had power to make the transfer, and in addition the transferee must have acted in good faith. This is based on the principle of equity that one, who allows another to hold himself out as the owner of an estate and a third party purchased for value from the apparent owner in the belief that he is the real owner, the man, who so allows the other to hold himself out, shall not be permitted to recover upon his secret title, unless he can over throw that purchaser by showing either that he had direct notice or something which amounts to constructive notice of the real title, or that there existed circumtances which ought to have put him upon an enquiry, which if prosecuted would have lead to a discovery of it. (See: Ramcoomar v. Macqueen).
It is equally well settled, and the Section is quite clear, that the real owner must have by his consent express or implied held out the ostensible owner as the owner of the property. If either by words or by conduct, he induced others to treat such a person as the real owner and to do that from which they might have abstained, he cannot question the legality of the Act to the prejudice of those who acted in good faith. Mere possession of a Manager cannot be treated as ostensible ownership with the consent of the real owner. In every case, where a transferee for valuable consideration seeks protection under Section 41 of the Transfer of Property Act, he must show that it was the real owner, who permitted or created the apparent ownership of the transferor either by express words or consent or by acts or conduct, which imply consent. Conversely, it must be held that if the real owner was not responsible for permitting or creating the apparent ownership, the protection under Section 41 will not be available to a transferee from such person because such a person cannot be said to be an ostensible owner as his claim to ownership does not arise from the consent of the real owner. In substance, before one can be considered to be an ostensible owner, it must be shown that it was with the consent express or implied of the true owner that he was enabled to represent himself as the owner of the property to a bonafide purchaser for value without notice. If it is found that the so called ostensible owner by any fraudulent means created documents without the knowledge of the real owner and represented himself as the owner of the property, Section 41 of the Transfer of Property Act will not protect the interest of a transferee from such a person and it must be held that the ostensible ownership of the property is not created by an act of the real owner or with his consent express or implied. Indeed such a person cannot claim himself to be an ostensible owner. Section 41, in my view, incorporates a Rule akin to the Rule of estoppel whereby the real owner, who by reason of his conduct or express or implied consent was responsible for the creation of an ostensible ownership, cannot be permitted to set up his real ownership to defeat the rights of a bonafide purchaser acting in good faith and who despite reasonable enquiries could not discover such real ownership. It is, therefore, the conduct of the real owner which gives rise to an equity in favour of a bonafide purchaser acting in good faith. Section 41 is a statutory recognition of this equitable Rule.
8. In the instant case, defendant No. 2 did not deny the original title of the plaintiff. According to him, some time in the year 1947-1948 she conferred title on him by Hiba-bil-ewaz. That story has been disbelieved by the Courts-below concurrently. It must, therefore, be held that the story of Hiba-bil-ewaz was a creation of defendant No. 2 himself and this was not done with the consent express or implied of the plaintiff. The next document upon which reliance was placed is Ex. D.1 said to be an application written by the plaintiff to the Revenue Authorities transferring her occupancy rights in favour of defendant No. 2. The trial Court found that, that documents had been created by defendant No. 2 himself, who having enjoyed the faith and trust of the plaintiff obtained her signatures on blank papers and used them for the purpose of making out an application to the revenue authorities for the transfer of occupancy rights in his favour. The Appellate Court has not upset this findings, but has proceeded on the basis that even the Patta so granted to the defendant No. 2 was not a document of title. It will thus, appear that if these two transactions are excluded, there is nothing else that the plaintiff did which can amount to an express or implied consent on her behalf enabling the defendant No. 2 to hold himself out as an owner of the property. As I have observed earlier, if a person creates false documents in his own favour without the knowledge of the real owner, that cannot by any stretch of logic be construed as having been done with the express or implied consent of the real owner. In the instant case, it appears that defendant No. 2 throughout represented to the plaintiff, his mother-in-law, that he was acting on her behalf and in her interest. The story of Hiba-bil-ewaz and transfer of occupancy rights in his favour was built up by defendant No. 2 without even the knowledge of the plaintiff. In these circumstances, I can find no fault with the finding of the Appellate Court that defendant No. 2 cannot be described as an ostensible owner so as to give protection of Section 41 to defendant No. 1. This was really a case, where defendant No. 2 attempted to set up his own title without the consent express or implied of the plaintiff. He was therefore pretending to be the real owner, and was not acting as an ostensible owner. I, therefore, concur with the finding of the Appellate Court that in the facts and circumstances of this case, it cannot be said that defendant No. 2 was an ostensible owner.
Assuming that defendant No. 2 may be treated as an ostensible owner, the question as to whether defendant No. 1 exercised due care and caution and acted in good faith before making the purchase so as to entitle him to the protection of Section 41 of the Transfer of Property Act, is a pure question of fact. The Courts-below have concurrently held that defendant No. 1 did not make reasonable enquiries and if he had done so, he would have found out that defendant No. 2 was not the owner of the property and was merely a Manager of the plaintiff being her son-in-law. In my view, the finding is justified having regard to the fact that circumstances existed, which should have put defendant No. 2 on guard. The document of title shown to him by defendant No. 2 was in favour of his mother-in-law. No doubt the defendant No. 2 claimed that he had acquired title by virtue of Hiba-bil-ewaz, but there was no document to prove that there was transfer of title by such Hiba-bil-ewaz. Defendant No. 1 claims to have made enquiries from defendant No. 2. That could hardly serve any purpose, because defendant No. 2 was obviously interested in convincing defendant No. 1 that he had title to the property. The agreement to sell was executed even before the defendant No. 1 had obtained certified copy of Ex. D.1, from which one may reasonably infer that in the matter of purchase of the suit lands, the first defendant was not influenced by Ex. D.1 or in any event, he did not consider it necessary to make enquiries by reference to the revenue records before entering into an agreement to sell. He did not make any enquiry to find out on whose behalf rent was being paid after the said Hiba-bil-ewaz. Moreover, if the defendant No. 2 had acquired title by a gift what was the need to file Ex. D.1 years later. In such a situation, when circumstances existed necessitating serious enquiry, and there was no document of title in favour of defendant No. 2 as he claimed to have derived title orally from the plaintiff, a prudent person would have certainly made enquiries from the plaintiff herself. It is an admitted fact that for about 24 years defendant No. 2 was known to the family of defendant No. 1. It is therefore reasonable to assume that he must have known that the person in whose favour the document of title was, was no other than the mother-in-law of defendant No. 2. Such enquiry was not made.
9. For these reasons and other reasons mentioned by the Courts-below I find no reason to set aside the finding that defendant No. 1 failed to make reasonable enquiries which he was required to make before he would claim protection under Section 41 of the Transfer of Property Act.
10. I, therefore, find no merit in this appeal, and the same is accordingly dismissed. There will be no order as to costs.