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Smart Summary

Factual and Procedural Background

This second appeal arises from a suit concerning ownership and possession of a house located at Nimakhandi in Berhampur. The property originally belonged to Lakhan Fanda and was sold at auction in execution of a decree against him. The plaintiffs' predecessor, Murali, purchased the disputed house and other lands by registered sale deed dated 13-9-1963 from Bhagabati and her adopted son Anirudha, who had acquired the property at auction. Defendant No. 1 was inducted as a tenant by Murali but defaulted on rent and later disputed the plaintiffs' title, claiming ownership under a registered sale deed dated 10-4-1964 executed by Dolagovinda. The suit sought declaration of title in favor of the plaintiffs, invalidation of defendant No. 1's purchase, recovery of possession, and damages.

Defendants 1 and 4 filed written statements asserting that Dolagovinda was the real purchaser at the auction and that defendant No. 1 had purchased the property from Dolagovinda, claiming absolute ownership. The trial court held that Dolagovinda had a half interest in the property and that defendant No. 1 was not inducted by Murali, dismissing the suit. The lower appellate court confirmed the trial court's findings but additionally held the plaintiffs' sale deed invalid due to fraud on registration, thus dismissing the suit. The plaintiffs have appealed against this decision.

Legal Issues Presented

  1. Whether the lower appellate court erred in entertaining and deciding the plea of fraud on registration which was neither pleaded nor raised as an issue before the trial court.
  2. Whether the sale deed executed by Bhagabati in favor of Murali was valid and conferred title on the plaintiffs.
  3. Whether defendant No. 1 acquired prescriptive title by ouster of co-sharer Dolagovinda.
  4. Whether the suit house was jointly owned by plaintiffs and defendant No. 1 or whether the plaintiffs have exclusive title.

Arguments of the Parties

Appellants' Arguments

  • The plea of fraud on registration was neither pleaded nor raised as an issue before the trial court, hence the lower appellate court erred in deciding the same.
  • On the findings recorded, the lower appellate court should have decreed the suit in part in favor of the plaintiffs.

Respondent No. 1's Arguments

  • The sale deed alleged to be fraudulent was filed late and not exhibited during the evidence of the plaintiffs' sole witness, depriving defendant No. 1 of an opportunity to rebut or amend pleadings.
  • A plea of ouster and prescriptive title was specifically pleaded and an issue was raised and decided by the trial court, but the lower appellate court erred in not addressing this issue.

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
Venkatarama Rao v. Appa Rao, AIR 1936 PC 91 Inclusion of insignificant land in sale deed to confer jurisdiction is a device to evade Registration Act. Supported the principle that inclusion of property without intention to transfer is fraudulent registration.
Harendra Lal v. Hari Dasi Debi, AIR 1914 PC 67 Fictitious entry of non-existent property in mortgage deed to obtain registration is fraud on registration law. Reinforced that fraudulent inclusion of property invalidates registration.
Collector of Gorakhpur v. Ram Sundar, AIR 1934 PC 157 Definition of 'fictitious' extends to property not related to any effective purpose of use or enjoyment. Clarified scope of fraudulent registration beyond non-existent properties.
Narayan Prasad Maity v. Daitari Das, 1972(1) C.W.R. 253 Including land not belonging to vendor to confer jurisdiction is fraud on registration. Applied to facts where land was included only to confer jurisdiction, rendering registration invalid.
Mt. Ram Dal v. Ramchandrabali Devi, AIR 1919 Patna 572 Inclusion of property in deed bona fide despite vendor not having interest at time of transfer does not necessarily imply fraud. Distinguished bona fide inclusion from fraudulent registration.
Deonandan Singh v. Pambahal Singh, AIR 1969 Patna 203 Non-existence of title at time of transfer does not always indicate fraudulent inclusion. Qualified the principle on fraudulent registration.
Md. Abdul v. Syed Meera, AIR 1967 Madras 212 Plea of fraud on registration not pleaded at trial cannot be raised for first time on appeal. Supported the procedural rule that new pleas must be raised at trial to be entertained.
Siddik Mahomed Shah v. Mt. Saran, AIR 1930 PC 57 No evidence can be considered on a plea not put forward in pleadings. Reinforced necessity of pleading issues to allow evidence and adjudication.
Bhagabat Basudev v. Api Bewa, AIR 1974 Ori. 180 Absence of plea precludes consideration of related evidence or issue. Confirmed procedural requirement for raising issues.
Seth Suganmal v. Umraobi, AIR 1938 Nag. 550 Possibility of mistake or bona fide inclusion in property registration. Noted that fraudulent registration is not the only explanation for irregularities.

Court's Reasoning and Analysis

The court analyzed the validity of the plea of fraud on registration raised by the lower appellate court for the first time. It emphasized that Section 28 of the Indian Registration Act requires the property to exist within the jurisdiction of the registering officer, and fraudulent inclusion of property solely to confer jurisdiction vitiates registration. However, the burden of proving such fraud rests on the party pleading it, who must specifically raise the plea and support it with sufficient materials so that the issue can be adjudicated at trial.

In this case, no plea of fraud on registration was taken before the trial court, and the sale deed in question was exhibited late, depriving the plaintiffs of opportunity to respond. The court found it unfair and impermissible for the lower appellate court to entertain and decide the plea for the first time on appeal. Accordingly, the sale deed executed by Bhagabati in favor of Murali was held valid, conferring title on the plaintiffs jointly with defendant No. 1, who derived title from Dolagovinda.

However, the court also noted that defendant No. 1 pleaded ouster of co-sharer Dolagovinda and acquisition of prescriptive title, an issue decided against him by the trial court but not addressed by the lower appellate court. The court remitted this issue back to the lower appellate court for determination. The final outcome depends on whether ouster and prescriptive title are established.

Holding and Implications

The appeal is allowed in part. The decision of the lower appellate court is set aside to the extent that it entertained and decided the plea of fraud on registration without it being pleaded or raised as an issue at trial. The matter is remitted to the lower appellate court to decide solely the question of ouster and prescriptive title pleaded by defendant No. 1.

The direct effect of this decision is that the plaintiffs' title under the sale deed dated 13-9-1963 is recognized as valid unless the lower appellate court finds on remand that defendant No. 1 acquired prescriptive title by ouster. No new precedent on the substantive law is established; the ruling reinforces procedural principles regarding the necessity of pleading issues to be adjudicated.

    Ananda Chandra Sahu And Ors. v. Udayanath Rath And Ors.

    1. This second appeal by the plaintiffs is directed against confirming decision rendered by the Addl. District judge, Ganjam Boudh, Berhampur in Title Appeal No. 69 of 1979 upholding the decision of the Munsif, Berhampur in Title Suit No. 31 of 1970 dismissing the suit- The subject-matter of the suit was a house located at Nimakhandi in Berhampur. It belonged originally to one Lakhan Fanda. The house along with other lands were sold in an auction in execution of a decree obtained against Lakhan Bhagabati and her adopted son Anirudha purchased the property and got delivery of possession. Munli the father of plaintiffs 1, 2, 4, 5, 6 and 7 and husband of plaintiff No. 3, purchased the disputed house and other lands from Bhagabati and her adopted son by registered sale deed dated 13-9-1963 and inducted defendant No. 1 as tenant. The first defendant did not pay rent in time and persisted in his default despite several notices issued to him. Finally, he disputed the title of the plaintiffs and claimed title in himself under, registered sale deed dated 10-4-1964 executed by Dolagovinda in his favour. The plaintiffs have alleged that Bhaban, Gouranga and Khetrabasi were brothers. Kanhai was the son of Bhaban. Dolagovinda was his son. Defendant No. 4 is the widow of Dolagovinda and defendants 2 3, 5, 6 and 7 are his descendants. Khetrahasi left behind his widow, Bhagabati and his son Bichitrananda who later died in 1945. So, Anirudha grandson of Dolagovinda. The suit was ,anon of title and for a further declaration that the purchase by defendant No 1 was not binding on them and for recovery of possession of the suit house and damages etc.

    2. Defendants 1 and 4 filed separate written statements. But the stand of each of them was the same. It was pleaded by them that the real purchaser at the Court "auction was Dolagovinda. It was pleaded that in the partition effected amongst the members-of the family of Bhaban and others, the entitlements flowing from the loan advanced by Lakhan Panda were allotted to the share of Bhaban, Since, however, the business was a joint family business, both the branches of Bhaban and Khetrabasi figured as plaintiffs and were arrayed as decree-holders. Defendant No. 1 pleaded that he was inducted by Dolagovinda as a tenant about a quarters of a century prior to the institution of the suit. He had effected substantial repairs and had electrified the house and thereafter purchased the property from Dolagovinda under registered sale deed Ext. G dated 10-4-1964. Dolagovinda alone having title to the property, he claimed to be the absolute owner of the house.

    3. On a consideration of the evidence, it was held by the learned Munsif that Bhagabati and her son were not the scle auction purchaser;. Dolagovinda had half interest in the property persuant to the purchase in the auction. Defendant No. 1 had not been inducted by Murali, So holding, it dismissed the suit observing that the plaintiffs could seek appropriate relief in properly constituted suit. He negitived the plea of defendant No. 1 that Doiagovinda had prescribed title by ouster of his co shaker.

    In appeal, the lower appellate Court confirmed the finding recorded by the trial Court that Bichitrananda represented by her mother guar- dian Bhagabati and Doiagovinda were the joint owners having jointly purchased the disputed house. It further confirmed the finding that defendant No. 1 had not been inducted as a tenant by Murali. On the aforesaid premises, it would have ordinarily declared that the plaintiffs acquired moity interest along with defendant No. 1 but for the fact that the evidence disclosed fraud on registration by the vendor and vendee of the sale deed dated 13-3-1963 (Ext. 8). Hence, it held the sale deed invalid and that Murali and consequently his successor-in-mterest did not acquire any interest on the property in dispute. So holding, it confirmed the dismissal of the suit.

    4. Mr. R. K. Mohapatra, the learned counsel for the appellants, has urged that the plea of fraud on registration having neither been pleaded nor an issue being raised and the question not having been, rasied before the trial Court, it was not open to the lower appellate Court to said plea. The lower appellate Court should have, therefore on the findings recorded by it decreed the suit in part.

    Mr. P. K. Misra, the learned counsel for respondent No. 1, has how- ever urged that the sale deed in question was filed at a very late stage and was not even exhibited in course of the evidence of P. W. 1, the sole wit- ness examined on behalf of the plaintiffs.' But having been exhibited at the late stage of argument, defendant No. 1 was deprived of an opportunity of adducing evidence and even raising a plea by way of amendment of his pleadings. He has further urged that a plea of ouster was specifically pleaded and specific issue was raised and answered by the trial Court (issue No. 2). The lower appellate Court erred in law in not adverting to the said plea and failing to record a finding on the same issue.

    5. The sale deed dated 13-9-1963 executed by Bhagabati representing Bichitrananda in favour of Murali, the predecessor-in-interest of the plaintiffs, was registered in the office of the Sub-Registrar, Cuttack. The bulk of the properties were not located within the jurisdiction of the Sub- Registrar, Cuttack. Only 2 decimals of land was located within his jurisdiction. P. W. 1 stated in his evidence as follows :

    "...I had accompanied my father to Cuttack when the suit house was purchased by my father along with some lands situated at Jagadalpur and Baulajhula only for Rs. 4000/-, Besides the suit house and lands stated above, no other property was purchased in the sale deed..."

    Relying on the aforesaid statement by plaintiff No. 1 (examined as P. W, 1), the sole witness examined on behalf of the plaintiffs, it was contended before the lower appellate Court that inclusion of two decimals of land located within the jurisdiction of the Sub-Registrar, Cuttack, was solely with a view to conferring jurisdiction on the Sub-Registrar, Cuttack. The parties have no intention that the said property was to be transferred. Hence, there was fraud, on registration rendering the sale invalid, The lower appellate Court accepted the said contention.

    6. I now consider the authorities some of which were cited at the Bar :

    In Venkatarama Rao v. Appa Rao, AIR 1936 PC 91, a single yard of land located within the Godavari registration area was included in the sale deed. The facts disclosed that the purchaser never made any attempt to take possession of the one yard of land in any form, He neither lived in the village in which the land was located nor did he have a other property in the said village. There was no evidence as to what possible use the purchaser could have had for a single yard of land. It was doubtful if the land really belonged to the vendor. From the aforesaid and other circumstances, the Privy Council inferred that it was the inevitable conclusion that neither the vendor intended to sell nor did the purchaser intend to buy this almost ridiculous fraction of the land and the sale was a mere device to evade the Registration Act.

    In Harendra Lal v. Hari Dasi Debi AIR 1914 PC 67, then had been included in a mortgage deed a plot of land located in Calcutta. The said property was found to be non-existent. The registration was held to be invalid. It was observed :

    "Their Lordships hold that this parcel is in fact a fictitious entry, and represents no property that the mortgagor possessed or intended to mortgage, or that the mortgagee* intended to form part of his security. Such an entry intentionally made use of by the parties for the purpose of obtaining registration in a district where no part of the property actually charged and intended to be charged in fact exists is a fraud on the registration law, and no registration obtained by means thereof is valid."

    In Collector of Gorakhpur v. Ram Sundar, AIR 1934 PC 157 their Lordships expressed the opinion that the word 'fictitious' used in Harendra Lal's case (supra) was not confined to non-existing properties. It was satisfied if the deed did not 'relate to a. specified property for any effective purpose of enjoyment or use.

    In Narayan Prasad Maity v. Daitari Das, 1972(1) C. W. R. 253, it was' found that one decimal of land situated in mouza Anantapur which did not belong to the vendors and hence they had no intention of transfe- rring the same, was included in the sate deed with the object of conferring jurisdiction on the Sub-Registrar, So, who registered the document ? It was held that it not being the intention of the vendor to self the one decimal of land nor of the vendee to purchase the said land, there was fraud on the registration law.

    In Mt. Ram Dal v. Ramchandrabali Devi, AIR 1919 Patna 572, the property included in the "deed of transfer was partly situated at Benaras and partly elsewhere. It was held that though the transferor had ceased to have any interest in the property located in Benaras, he was acting bona tide in including the property located at Benaras in the deed of In Deonandan Singh v. Pambahal Singh, AIR 1969 Patna 203, at one point of time the vendors had some interest in the property. Hence it was held that non-existence of title to the property at the time of transfer would not in all circumstances lead to the inference that the inclusion was facetious with a view to conferring jurisdiction on the Sub- Registrar of the area where the properties are located.

    7. The following can be ruled out from the principles enunciated in the aforesaid decisions :

    Section 28 of the in tan Registration Act requires that the property should exist within the jurisdiction of the Sub-Registrar in order to entitle him to register the same If the property is non-existent, he does not have jurisdiction If the property is included fraudulently with a view to conferring jurisdiction without any intention of its transfer, the registration is vitiated. If fictitious property is included, that is a fraudulent inclusion of property to confer jurisdiction. If the property did not belong to the vendor but was included with the intention of conferring jurisdiction, that is a fraudulent inclusion of property. Even if the property belonged to the vendor but there was no intention to transfer the same, the inclusion being only for the purpose and with the intention of conferring jurisdiction on the Sub-Registrar within whose jurisdiction the property is located, that amounts to fraudulent registration if however pirties have acted bona fide without any fraudulent intention, the registration would not be vitiated.

    8. The burden of establishing fraudulent registration is on the parry advancing the plea which has to be specifically taken with sufficient matrials so that an issue is raised focussing the attention of the parties thereon enabling them to adduce evidence. In Md. Abdul v. Syed Meera, AIR 1967 Madras 212; fraud on registration was not pleaded. the question was for the first time raised before the lower appeflate Court. It was held that a matter which though on law depends upon the question of fact for its determination cannot be raised for the first time in appeal and relied upon a decision of the Privy Council in Siddik Mahomed Shah v. Mt. Saran, AIR 1930 PC 57, where it was held that no amount of evidence can be looked into upon a plea which was never put forward. Absence of a plea was also noticed in the case of Bhagabat Basudev v. Api Bewa AIR 1974 Ori. 180.

    9. The propriety and fairness of such a principle can be questioned. If a plea had been raised it could have been urged by the other side that in fact the property belonged to the vendor or had at one point of time beloged to him and he was in possession thereof and/or included the property bona fide and there was no collusion between the parties. It could as well be a case of mistake as was observed in the case of Seth Suganmal v. Umraobi, AIR 1938 Nag. 550 and Md. Abdul Razack v. Syed Meera, AIR 1967 Madras 212.

    10. In this case there is no evidence on record that the property did not belong to the vendor nor is there evidence that the property was not intended to be sold or that the vendor was not in possession of the said property. The sale deed Ext. 8 was filed on 6-8-1974. Evidence was recorded in September, 1974. There was ample time for the defendant No. 1 to take the plea of fraudulent registration, in the written statement by way of amendment so that an issue could have been raised and evidence adduced. Even the question was not raised before the trial Court. From the stray sentence in the evidence of P. W. 1 extracted in paragraph-5 an attractive argument relating to fraud on registration was presented and sustained by the lower appellate Court. That was unfair to the plaintiffs, it sprang surprise on them.. Had an issue been struck, they could have led evidence to show that there was no fraud on the registration law. It is settled law that such evidence even if there was any would not be available to be looked into. It was no doubt true that where parties had proceeded to trial knowing fully well the issues involved, absence of an issue does not vitiate the finding but where no plea has been raised, no issue has been struck and the question was not canvassed before the trial Court, it is impermissible for the lower appellate Court to entertain such a plea and decide the same. I would, therefore, accept the contention of the learned counsel for the appellants that the lower appellate Court was in error in entertaining the said plea and deciding the same against the plaintiffs. The result is that Murali acquired title to the disputed property under sale deed Exr. 8 and was the joint owner with Dolagobinda who, conveyed his interest to defendant No. 1 under Ext. G.

    11. The aforesaid would have entitled the plaintiffs to a decree but for the fact that defendant No. 1 had pleaded ouster of the co-sharer by Dolagovinda and acquisition of prescriptive title by him and an issue had been struck. Though the same had been answered against defendant No. 1, there is no reference to the said controversy in the judgment of the lower appellate Court. If the plea of ouster and acquisition of title by prescription is sustained, ' the plaintiffs would lose despite acquisition of title under Ext. 8. The said question should have been answered by the lower appellate Court. I would, therefore, remit the matter to the lower appellate Court to decide the said question only. If the lower appellate Court holds on the evidence that there was ouster by Dolagovinda and acquisition of title by prescription by him and by defendant No. 1, the transferee, the suit shall be dismissed. If, however, the said question is decided against defendant No. 1,.the plaintiffs* title, jointly with defendant No. 1, shall be declared and appropriate consequential relief shall be granted.

    12. In the result, the appeal is allowed in part. The decision of the lower appellate Court is set aside to the aforesaid extent and the matter is remitted to the lower appellate Court for disposal in accordance with law and the observations made above. Success being divided, parties are to bear their respective costs of this Court.

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    Ananda Chandra Sahu And Ors. v. Udayanath Rath And Ors.
    (Jan 24, 1991)