Yenugu Achayya v. Eranki Venkata Subba Rao

Judgement

SUBBA RAO, C.J. :- Defendants 1 and 2 have preferred this appeal against the decree and judgment of the Court of the Subordinate Judge of Kakinada confirming that of the District Munsif, Kakinada, in O. S. No. 266 of 1951 a suit filed by respondents 1 and 2 for a declaration that they were entitled to the surplus sale proceeds in Court deposit in O. S. No. 124 of 1945 on the file of the same Court.

2. The facts, that gave rise to the appeal, may be briefly stated. 10 acres of Zamindari jeroiti land in Chinnayapalem village known as Peddagaruvu originally belonged to the father-in-law and the husband of the second defendant, Yenugu Achayya and Apparao. On 18th February, 1939, they executed a sale deed Exhibit A-8 conveying the said land in favour of the plaintiffs and put them in possession thereof. It is not disputed that the consideration was also paid to the vendors. As the second defendants husband Apparao suddenly died, the document could not be registered within the time prescribed.

After his death, though an attempt was made to get it compulsorily registered, for one reason or other, it could not be done. Subsequent to the sale the plaintiffs and the other members of their family, defendants 3 to 6, partitioned their family properties including the said land and in the partition, the land was allotted to the plaintiffs share and they were enjoying the same. They leased it out to tenants and also paid the taxes due thereon. Meanwhile, the first defendant, who was interested in the holding of which the aforesaid land formed part, paid the taxes due on file entire holding and filed O. S. No. 124 of 1945, on the file of the District Munsifs Court for contribution. To that suit first defendant and defendants 2 to 6 were made parties.

The first defendant alleged therein that the plaintiffs were in possession and enjoyment of Peddacheruvu in pursuance of the sale deed executed by the husband of the second defendant. Though the decree was for a sum of Rs. 321, the land in the possession of the plaintiffs was sold and a sum of Rs. 1025, was realised. The first defendant drew out a sum of Rs. 321, from the sale proceeds and the balance of Rs. 704, was in Court. The second defendant filed an application under Rule 165 of the Civil Rules of Practice for drawing out the amount. The plaintiffs resisted that application on the ground that the sale proceeds related to the property that was sold to them by the second defendants husband and her father-in-law and that they were in possession thereof at the time when it was sold in Court auction.

The learned District Munsif directed the parties to a separate proceeding to establish their right to the land to enable them to claim the money in Court deposit. The plaintiffs thereafter filed O. S. No. 266 of 1951 for a declaration that they were entitled to the surplus proceeds in Court deposit. Both the Courts, relying upon the provisions of section 53-A of the Transfer of Property Act decreed the plaintiffs suit. Hence, the appeal.

3. Learned Counsel for the appellants contends that section 53-A of the Transfer of Property Act gave statutory recognition to a defensive equity and that the said provisions can, therefore, be relied upon by a transferee as a defendant but not as a plaintiff. As the arguments turn upon the provisions of section 53-a, it would be convenient to read the section.

Section 53-A. "Where any person contracts to transfer for consideration any immoveable property by writing signed by him or on his behalf from which the terms necessary to constitute the transfer can be ascertained with reasonable certainty,

and the transferee has, in part performance of the contract, taken possession of the property or any part thereof, or the transferee, being already in possession, continues in possession in part performance of the contract and has done some act in furtherance of the contract

and the transferee has performed or is willing to perform his part of the contract,

then, notwithstanding that the contract, though required to be registered, has not been registered, or, where there is an instrument of transfer, that the transfer has not been completed in the manner prescribed therefor by the law for the time being in force, the transferor or any person claiming under him shall be debarred from enforcing against the transferee and persons claiming under him any right in respect of the property of which the transferee has taken or continued in possession, other than a right expressly provided by the terms of the contract :

Provided that nothing in this section shall affect the rights of a transferee for consideration who has no notice of the contract or of the performance thereof."

4. It is not necessary to consider the preexisting law of part-performance as it obtained in India or in England, for after the enactment of section 53-A laying down the limits of the doctrine, we are only governed by the said provisions. The necessary conditions for the application of the section are (i) there is a contract to transfer immovable property for consideration, (ii) the contract is signed by or on behalf of the transferor, (iii) the terms can be ascertained with reasonable certainty from the document, (iv) the transferee is put in possession or if he has been already in possession continues in possession, (v) he has done some act in furtherance of the contract and (vi) the transferee has performed or is willing to perform his part of the contract.

If the aforesaid conditions are fulfilled the transferor or any person claiming under him shall be debarred from enforcing against the transferee and persons claiming under him any right in respect of that property. This section does not, even if the conditions laid down therein are complied with, convey title to the transferee. Notwithstanding the section, title can be transferred only after the registration of the document. Provision prevents a transferor from enforcing his rights in respect of the property against the transferee but enables him to sue the transferee upon the covenants contained in the document. In short, the mutual covenants will be operative, though title does not pass under the document.

The section does not either expressly or by necessary implication indicate that the rights conferred on the transferee thereunder can only be invoked as a defendant and not as a plaintiff. Under the terms of the section the transferor is debarred from enforcing against the transferee only rights in respect of the property and this bar does not depend upon the array of the parties. The transferee can resist any attempt on the part of the transferor to enforce his rights in respect of the property whatever position he may occupy in the field of litigation. In one sense, it is a statutory recognition of the defensive equity. It enables the transferee to use it as a shield against any attempt on the part of the transferor to enforce his rights against the property.

Whether the transferee occupies the position of a plaintiff or a defendant, he can resist the transferors claim against the property. Conversely, whether the transferor is the plaintiff or the defendant, he cannot enforce his rights in respect of the property against the transferee. The utility of the section or the rights conferred thereunder should not be made to depend on the manoeuvering for positions in a Court of law, otherwise a powerful transferor can always defeat the salutary provisions of the section by dispossessing the transferee by force and com pelling him to go to a Court as plaintiff. Doubtless, the right conveyed under the section can be relied upon only as a shield and not as a sword but the protection is available to the transferee both as a plaintiff and as a defendant so long as he uses it as a shield.

5. On the question raised in the case there is a decision of Patanjali Sastri, J., (as he then was) in Veera Raghava Rao v. Gopala Rao, AIR 1942 Mad 125 (A). The facts there were. The appellant and the respondent were two of the five brothers, who originally formed a joint Hindu family. Two of the brothers separated earlier but subsequently, there was a partition among the rest. The respondents case was that the property in suit was allotted to his share and that the appellant unlawfully trespassed it shortly before the suit. The suit was filed for possession of the said properties.

The learned Judge held that the document, whereunder the partition was effected, was not registered and, therefore, it was not admissible in evidence. The learned Judge further held that on the basis the parties were co-owners, one of the co-owners could not file a suit for eviction on the ground that he was in possession. It was then contended before the learned Judge that the plaintiff was entitled to possession under section 53-A of the Transfer of Property Act. In dealing with that argument, the learned Judge made the following observations :

"The limits of the application of the doctrine of part-performance have now been defined in section 53-A of the Act and it is plain that that provision only entitles a person in possession to invoke the doctrine as a shield to protect such possession if the conditions therein referred to are satisfied and does not enable a person who has lost possession to sue for recovery of it. Mr. Somasundaram frankly admitted that he could not invoke that doctrine in the circumstances of this case."

6. Apart from the fact whether section 53-A can be invoked in the case of partition documents, the aforesaid observations do not lay down that the statutory protection cannot be invoked by a transferee as a plaintiff. The learned Judge only stated that a transferee cannot file a suit and recover possession of the property from the owner on the basis of section 53-A. If so understood that decision does not really support the extreme contention of the learned counsel for the appellants.

7. The observations of Lord Macmillan in Pir Bux v. Mahomed Tahar, ILR 58 Bom 650 : (AIR 1934 PC 235) (B), are relied upon. There, the question fell to be considered on the preexisting law, i.e., the law prior to the enactment of section 53-A but pending the suit section 53-A came into force. Their Lordships noted that fact and remarked :

"It remains to take note of the fact that, since the present suit was brought, the law in India has been altered by the Transfer of Property (Amendment) Act, XX of 1929 which has inserted a new section 53-a in the principal act whereby a defendant in an action of ejectment may, in certain circumstances, effectively plead possession under an unregistered contract of sale in defence to the action. Their Lordships views, as expressed in the present case, must therefore be understood to be referable to the State of the law before this partial importation into India of the English equitable doctrine of part performance."

8. The observation namely that under the amended section a defendant in an action of ejectment, in certain circumstances, effectively plead possession under an unregistered contract of sale, apart from the fact that it is only an obiter, does not indicate that the Judicial Committee laid down that, under no other circumstances, could a transferee defend his possession. We do not understand the observation as circumscribing the limits of the defensive equity recognised by statute or as laying down an exhaustive enumeration of all the circumstances under which the said defence could be raised.

9. Strong reliance is placed upon the decision of the Judicial Committee in Probodh Kumar v. Dantmara Tea Co., ILR (1940) 1 Cal 250 : (AIR 1940 PC 1) (C). There, the plaintiffs were in possession of an estate under unregistered documents from the previous owners. Subsequently, the defendants got a registered conveyance of the estate in their favour from the same owners. The real contention between the parties related to the right to export quota under the India Tea Control Act (Act XXIV of 1933) which was passed to regulate the export of Tea from India. The licensing committee recognised the defendants as the persons entitled to the export quota rights of the estate. The plaintiffs filed the suit for a declaration that the defendant had no right or title to the estate and that they were debarred from enforcing any right to the estate including the right to sell tea under the export quota allotted to them or to transfer the quota rights to any other person. They also asked for an injunction. The suit was dismissed on the ground that the plaintiffs could not rely upon section 53-A of the Transfer of Property Act, in regard to the reliefs claimed by them in the suit. In the course of the judgment. Lord Macmillan made the following remarks :

"Their Lordships agree with the view expressed by Mitter, J., in the High Court that "the right conferred by section 53-A is a right available only to the defendant to protect his possession." They note that this was also the view of their late distinguished colleague Sir Dinshah Mulla, as stated in the second edition of his treatise on the Transfer of Property Act, at page 262. The section is so framed as to impose a statutory bar on the transferor; it confers no active title on the transferee. Indeed, any other reading of it would make a serious inroad on the whole scheme of the Transfer of Property Act."

10. No doubt, the observations are rather wide and, if literally understood, they support the appellants contention. But, we do not think that the Judicial Committee intended to lay down, irrespective of the nature of the relief claimed, that, under no circumstances, could the transferee rely upon the provisions of the Act as a plaintiff. We respectfully accept the statement of law that the section imposes a statutory bar on the transferor but it confers no active title on the transferee. In that case, two reliefs were asked for by the transferee. One was that the defendants had no title. This they could not ask for the obvious reason that title did not pass to the plaintiffs. The second relief asked for, namely, the relief of injunction against the defendants not to sell tea under the export quota did not, pertain to a right enforceable in respect of the property.

The right to export did not depend upon the ownership of the property but only on the export quota right issued by the Licensing Committee. As the plaintiffs sought to get a declaration of their title, which they did not acquire, the Privy Council rightly dismissed the suit. In that context, the question whether the rights conferred under section 53-A. without asserting title to the property were available to this plaintiff did not arise for consideration in that case, and, therefore, the observations relied upon could not be accepted as a considered decision on the question not raised or argued in that case.

11. The scope of section 53-A vis-a-vis the rights of the transferee to defend his rights as a plaintiff was considered in Ram Chander v. Maharaj Kunwar, ILR (1939) All 809 : (AIR 1939 All 611) (D). There, the plaintiff was a lessee of a house under a registered lease. But the lease was defective as it was not signed by both the parties as required by section 107 of the Transfer of Property Act. The suit was instituted against the subsequent purchaser of the house for an injunction restraining him from demolishing the house or otherwise interfering with the plaintiffs right as lessee. The learned Judges held that although the lease was defective and inoperative, the provisions of section 53-A of the Transfer of Property Act applied to the case and that the plaintiff had a right of suit. They also held that not only were the benefits of that section open to the transferee where he is a defendant but they can also be extended to a case in which he is the plaintiff. At page 815 (of ILR All) : (at p. 613 of AIR) the learned Judges observed :

"Now, in the present case, what is it that the plaintiff is attempting to do. He is not attempting to set up a transfer which is invalid; he has not instituted a suit for the declaration of the validity of the transfer; he has not instituted a suit in which he claims an order against the defendant directing him to perform any covenant of the transfer. What he is seeking to do is to debar the defendants from interfering with his possession into which he has entered with the consent of his transferor after the execution of a transfer in his favour. He is, in other words, seeking to defend the rights to which he is entitled under section 53-A of the Transfer of Property Act.......................... It is the defendants who are seeking to assert rights covered by the contract. The plaintiff seeks merely to debar them from doing so; the plaintiff is seek in to protect his rights. In a sense, in the proceedings he is really a defendant and we see nothing in the terms of section 53-A of the Transfer of Property Act to disentitle him from maintaining the present suit."

We respectfully agree with the aforesaid observations.

12. When the scope of section 53-A of the Transfer of Property Act was sought to be limited as in the present case, the Chief Court of Oudh in Ewaz Ali v. Firdaus Jehan, ILR 19 Luck 565 : (AIR 1944 Oudh 212) (E), rejected the contention. That case related to a house situated in the city of Lucknow. It was owned by one Dr. Mohammad Yunnus. He obtained a decree for eviction against the tenant Habib Ullah (3rd defendant). When the application for eviction was pending, the wife of Habib Ullah approached the doctor and agreed to purchase the same for a sum of Rs. 7,800. An advance was paid and the doctor executed a receipt in her favour agreeing to convey the property. Subsequently, the doctor excuted a registered sale deed in respect of the same property in favour of Ewaz Ali, the second defendant.

The purchaser brought himself on record in the execution petition. The wife of Habib Ullah, who had an agreement in her favour and was also in possession filed objections under Order 21, rules 99 and 100, Civil Procedure Code, relying upon her rights under S. 53-A of the Act. Her objections being overruled, she filed a suit under Order 21, rule 103, Civil Procedure Code, impleading therein the doctor, the purchaser and her husband as defendants. She sought a declaration that she was in possession of the house in suit on her own account and that she could not be dispossessed in execution of the ejectment decree.

The learned Judges held that her possession was referable to the contract in her favour. It was then contended that the equitable right conrerred on her under S. 53-A was not available to her as she was the plaintiff in that case. The learned Judges held that, in a suit under Order 21, rule 103, Civil Procedure Code the object of the suit was to protect possession and the capacity in which the plaintiff came to Court was in reality one of defence. The learned Judges expressed their view of S. 53-A thus at page 578 (of ILR Luck) : (at P. 218 of AIR) :

"It is clear to our mind that the section cannot be used as a weapon of attack, and that it confers upon the transferee the privilege of invoking the doctrine embodied therein only as a shield against any invasion of his rights by the transferor or persons claiming under him. The words of the section do not warrant a conclusion that a plaintiff as such is necessarily debarred from the benefit of the rule. Where by the nature of the case, as disclosed by the pleadings or otherwise it is apparent that the transferee comes to defend his possession against the invasion of it by the transferor, he is entitled to invoke the aid of the equitable doctrine therein embodied.

13. Having considered the facts of that case, they held that the position of the plaintiff there was that of a person who was trying to defend her possession upon the doctrine of part performance against the invasion thereof by the transferor and his representative. When the observations of the Judicial Committee (already extracted above) in ILR (1940) 1 Cal 250 : (AIR 1940 PC 1) (c), were relied upon, the learned Judges made the following remarks at page 579 (of ILR Luck) : (at P. 219 of AIR) :

" We are unable to consider that their Lordships of the Privy Council by the use of the word defendant in the above observation intended to mean that the right conferred by S. 53-A was not available to a person in the position of Mst. Firdaus Jahan and that the mere position of a party in the heading of a suit would determine whether he is or is not enitled to benefits of the section The subsequent sentence makes this clear. When they use the word defendant they use it to describe the position of a person who pleads S. 53-A and they say his position must be that of a person who invokes it for defending himself against this transferor."

14. This judgment is rather instructive and, with great respect to the learned Judges, we accept and follow their reasoning.

15. A Division Bench of the Patna High Court in Madhuban v. Basanta, AIR 1947 Pat 424 (F) dismissed the plaintiffs claim for declaration of their title and for possession against a purchaser for valuable consideration but in whose favour a registered document was not executed. At page 426, Meredith, J., observed :

Where a sale is void for lack of registration under S. 54, Transfer of Property Act, S. 53-A does not give it any validity. The provisions of that section do not confer any title on the transferee. They can be used only in defence and not far attack, and moreover they can be used in defence only against the transferor or any other person, claiming under him."

These observations do not support the respondents. The statement that the provisions of the Act could be used only in defence and not for attack does not necessarily indicate that it would be available only to a defendant and not to a plaintiff.

16. The defensive use of the provision may as well be by a transferee as plaintiff in a suit against attack by a transferor or his representatives.

17. Nor does the decision of Allahabad High Court in Pearey Lal v. Pirthi Singh, ILR (1945) All 910 : (AIR 1945 All. 422) (G) lay down a contrary view. There, the Collector acting under S. 5 of the U.P. Regulation of Sales Act, 1934, granted to the plaintiffs a sale certificate.

Though they got symbolical possession of the properties, they did not get actual possession. Thereafter, they instituted a suit for actual possession of the properties in dispute on the basis of the sale certificate. The defendants, inter alia, contended that the plaintiffs cannot base the suit on an unregistered document, whereas on behalf of the plaintiffs, reliance was placed on S. 53-A of the Transfer of Property Act. In negativing the contention, Wali-ullah J., observed at page 912 (of ILR All) : (at p. 423 of AIR) :

"Learned Counsel for the appellants has tried to base his arguments on the equitable doctrine of part performance as embodied in S. 53-A of the Transfer of Property Act but it is perfectly clear that the plaintiffs-appellants who have instituted the present suit for possession and who take their stand upon the title which they purport to have acquired by means of the so called transfer made by the Collector as embodied in the sale certificate Exhibit 4 cannot take advantage of the rule laid down in S. 53-A of the Transfer of Property Act. The provisions of S. 53-A are meant only to be used as a shield by a person in possession who in pursuance of an inchoate deed of transfer has failed to secure good title. The benefit of the doctrine of part performance is not available to the plaintiff who seeks to acquire a valid title to the property dealt with under a transaction which remains inchoate."

18. No exception can be taken to these observations. The plaintiffs in that case were seeking to recover possession of the property on the assertion of a title which they did not possess. They relied upon the provisions of S. 53-A not as seeks to enforce his rights against the property. The learned Judges did not lay down that the defensive equity could not be relied upon by then transferee as a plaintiff to defend his right against the attacks of a transferor.

19. It is not necessary to multiply cases. It is settled law that under S. 53-A of the Transfer of Property Act, no title passes to a transferee. He cannot file a suit for a declaration of his title to the property or seek to recover possession of the same on the basis of any title conferred on him. But, if the conditions laid down in the section are complied with, it enables the transferee to defend his possession if the transferor seeks to enforce his rights against the property. This statutory right he can avail himself both as a plaintiff and as a defendant provided he is using his right as a shield and not as a sword. Or to put it in other words, he cannot seek to enforce his title but he can resist the attack made by a transferor.

20. In the present case, it is clear from the facts that plaintiffs were put in possession pursuant to an unregistered sale deed. There was a partition among the members of the family and the plaintiffs were in actual enjoyment of the same paying taxes. The decree-holder in O.S. No. 124 of 1945 brought the property in the possession of the plaintiffs to sale and the sale proceeds were deposited in Court. The second defendant applied for payment to her of the balance of the amount deposited in Court. The plaintiffs relied upon S. 53-A of the Transfer of Property. Act as a defence to her claim.

As the District Munsif directed the parties to get their rights decided in a suit, the plaintiffs filed the present suit, wherein they claimed that they were in possession, that the properties in their possession were sold and that the second defendant was seeking to enforce her rights against the properties by drawing out the sale proceeds. Though they were plaintiffs in the suit, in effect and substance, they were only defending their right when the transferors representative was attempting to enforce her rights against the property. In this view, the plaintiffs are not claiming any title to the property but are only relying upon the statutory rights as a shield against the transferor.

21. Even so, it is contended that as the plaintiffs are not in possession of the property, they cannot rely upon the provisions of S. 53-A. Section 53-A does not say that the transferee should be in possession on the date when the transferor seeks to enforce her right against the property. The essential condition for invoking the doctrine is that he should have taken possession of the property in part performance of the contract and has done some act in furtherance of the contract. The plaintiffs were admittedly put in possession and the fact that subsequently they lost possession could not deprive them of their rights which they are entitled to under the section. The transferor could recover the money now in Court deposit only by enforcing her right against the property and the plaintiffs could prevent her from doing so and that is what they are now seeking to do in the suit. If the transferor could not enforce her right against the property and, therefore against the money in Court representing that property, the money would automatically be paid to her as the property was sold by Court as her property.

22. Learned counsel then contends that the transferor is not enforcing her right against the property but only against the money and, therefore, the provisions of S. 53-A will not, in terms, apply. We cannot appreciate this argument also. Unless the transferor can enforce her right against the property, she cannot enforce her right against the money, for the money in Court is really a substitution for the property. The rights of the parties in regard to the money could only be decided having regard to their rights in respect of the property. If they had no right to the property they would have none to the money.

To illustrate : if the plaintiffs had drawn out the money and thereafter the second defendant filed a suit to recover the money she could not obviously succeed for, if allowed, she would be enforcing her rights against the property which she is prohibited under S. 53-A. So too, if the property was acquired by the Government and compensation was paid to the transferee the plaintiffs suit for recovery of the compensation from transferee would be defeated by reason of S. 53-A and the fact that money was in Court would not make any difference, for, it represents the value of the property in the possession of the transferee sold in Court-auction.

23. For the aforesaid reason, we hold that the plaintiffs were only relying upon the defensive equity statutorily recognised under S. 53-A of the Transfer of Property Act.

24. In the result, we agree with the view expressed by the Courts below and dismiss the appeal with costs.

Appeal dismissed.