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Attorney(S)
  • For the Appellant: N. Sundara Iyer V. R. Venkitakrishnan
Judges
  • Koshi, C.J
  • Vaidialingam, J.
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Citation Codes
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citation codes
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Attorney(S)
  • For the Appellant: N. Sundara Iyer V. R. Venkitakrishnan
Judges
  • Koshi, C.J
  • Vaidialingam, J.
Acts
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Smart Summary

Judicial Opinion Summary — Appeal in O.S. 13 of 1951

Factual and Procedural Background

This appeal arises from a decree and judgment of the Subordinate Judge, Palghat in O.S. 13 of 1951. The suit sought a declaration that a sale (alienation) dated 1-8-1943 executed by the 2nd defendant (the widow of the deceased Srinivasa Ayyar) in favour of the 1st defendant was not valid and binding on the reversioners to the estate of the deceased after the life-time of his widow.

The plaintiff and the 3rd defendant are divided brothers of the deceased Srinivasa Ayyar, who had been an employee of the Central Bank of India and died in or about October 1942. The 2nd defendant (a childless widow) sold certain property on 1-8-1943 to the 1st defendant allegedly to discharge debts incurred by the deceased. The trial Court found the debts genuine and discharged by the 1st defendant, but concluded there was no legal necessity for the sale because the widow had received Provident Fund moneys which could have been used to discharge the debts; accordingly the trial Court held the sale-deed (Ext. B-5) not binding on the reversioners and decreed the suit.

The 1st defendant (the purchaser) appealed. During the pendency of the appeal statutory provisions (referred to by counsel) came into force, but the Appellate Court considered the matter on merits and ultimately allowed the appeal, setting aside the trial Court's decree.

Legal Issues Presented

  1. Whether the alienation (sale-deed dated 1-8-1943, Ext. B-5) executed by the 2nd defendant in favour of the 1st defendant was legally justified and binding on the reversioners to the estate.
  2. Whether, despite the widow's having received Provident Fund moneys, there existed a legal necessity to alienate the suit properties to discharge the deceased's debts.
  3. Whether the purchaser (1st defendant) had made bona fide and sufficient enquiries and had paid adequate consideration so as to validate the sale against the reversioners.
  4. Ancillary statutory contentions raised by counsel: applicability of Section 14 of Central Act XXX of 1956 and applicability of Section 43 of the Transfer of Property Act — these were urged by counsel but the Court held consideration of these statutory issues unnecessary in view of its decision on the merits.

Arguments of the Parties

Plaintiff's Arguments

  • The recitals in the sale deed dated 1-8-1943 were merely nominal and there were no debts to be discharged at the time of the deceased's death.
  • The properties were sold for a grossly inadequate price.
  • The widow (2nd defendant) had received a Provident Fund amount from the Central Bank and therefore there was no necessity to alienate the suit properties to discharge debts.

1st Defendant (Purchaser)'s Arguments

  • The recitals about the debts in the sale deed were true and represented binding debts of the deceased.
  • The purchaser had actually discharged those debts as part of the sale consideration.
  • The purchaser made honest and bona fide enquiries and was satisfied that the widow had no other way of discharging the debts.
  • The purchaser paid the correct market price for the properties and the plaintiff's allegation of gross under-valuation was incorrect.

2nd Defendant (Widow)'s Arguments

  • She stood by the transaction and contended that the house sold was dilapidated and fetched only negligible rent, and that she had moved to Trichur and did not require that dilapidated house.
  • The lands sold were Kanom properties, difficult to manage and thus legitimately sold.
  • The debts were genuine and subsisted on the death of Srinivasa Ayyar; she had settled disputes with creditors (including the 3rd defendant) to secure a peaceful life.
  • Although she claimed a special right in the Provident Fund amount, she asserted that enquiries were made at the time of sale and that the properties were sold after due enquiries about prevailing market value.

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
Thailambal Ammal v. Kesavan Nair, 1957 Ker LT 344 : ILR (1957) Kerala 287 : AIR 1957 Kerala 86 Holds that if a female owner who had only a limited interest sold property before the Act came into force and put the vendee in possession, she could not be regarded as "possessed" when the Act came into force. The Court noted this decision is directly against the appellant's contention regarding the effect of subsequent statutory change and stated it follows that decision; the Court therefore declined to accept the appellant's submission based on that statutory contention.
Venkayamma v. Veerayya, 1956-2 Andh WR 988 : AIR 1957 Andh Pra 280 Referred to as a decision followed by the Thailambal Ammal case (supporting the principle above). The Court recorded that Thailambal Ammal had followed this Andhra Division Bench decision; used as supporting authority for the view taken in Thailambal Ammal.
Article, 1956-2 Mad LJ 59 at p.66 Article stated to be to the same effect as the cases mentioned. The Court noted the article's concurrence with the judicial position described in Thailambal Ammal; no separate application beyond noting was made.
Gosta Behari Bera v. Haridas Samanta, 61 Cal WN 325 : AIR 1957 Cal 557 Cited by counsel in support of submissions. The Court recorded that counsel referred to this decision but did not state any adoption of its rule; it considered the authority among other references when assessing statutory-contention arguments.
Hari Kishen v. Hira, (S) AIR 1957 Punj 89 Cited by counsel. The Court recorded the citation; there is no separate statement that the Court relied upon its rule in deciding the appeal on the merits.
Laxmi Debi v. Surendra Kumar, (S) AIR 1957 Orissa 1 Cited by counsel. The Court noted the citation but did not state a direct application to its reasoning on the facts of this appeal.
Kamala Devi v. Bachulal Gupta, (S) AIR 1957 SC 434 Cited as a Supreme Court decision potentially relevant to the statutory point. The Court observed that if the Supreme Court had given a definitive decision it would be binding, but concluded that the Supreme Court did not give a final decision on the precise point; therefore the Court did not treat it as displacing the local decision it followed.

Court's Reasoning and Analysis

The Appellate Court analyzed the matter on the merits and identified the narrow factual and legal focus: it was undisputed at trial (and on appeal) that the alleged debts enumerated in the sale-deed (Ext. B-5) were genuine, were discharged by the purchaser, and that the sale price was not challenged during trial. Thus the determinative question was whether the alienation was justified in the circumstances and therefore binding on the reversioners.

The Court found the trial Judge erred in over-emphasising a single circumstance — that the widow had received Provident Fund moneys and therefore could have discharged the debts without alienating the property. The Appellate Court held that the trial Judge did not give due weight to other material evidence on the record:

  • Evidence (D.W.2, son of the 1st defendant) indicated the house (Schedule A) was very old and dilapidated and that the 2nd defendant still possessed some jenm properties yielding a small amount of paddy.
  • Evidence (D.W.3, K.S. Narayana Ayyar, advocate) described the negotiations, settlements with creditors (including the 3rd defendant), the enquiries made, and that when he obtained the widow's signature on Ext. B-5 on 1-8-1943 he saw her occupying a house in Trichur.
  • Documentary evidence showed the widow had received Provident Fund moneys (Ext. A-2, Rs. 8,000 on 31-10-1942), and the Court accepted the explanation that a major portion of that amount had been used to build a house at Trichur for the widow's reasonable living and convenience.

On these factual findings the Court concluded:

  • The suit properties comprised a dilapidated house yielding negligible rent and several small Kanom land items that were distant and difficult to manage; the widow's move to Trichur and use of Provident Fund moneys to build a residence there were consistent with the evidence and reasonably explained the widow's conduct.
  • The purchaser (1st defendant), through D.W.2 and D.W.3, had made prudent and careful enquiries about the necessity for the sale and about the absence of alternative means to discharge the debts; the purchaser also actually discharged the debts.
  • Given the foregoing, there existed a legal necessity and bona fide justification for the alienation of the specified properties under Ext. B-5.

Because the trial Court placed undue weight on the availability of Provident Fund moneys and did not adequately consider the totality of the evidence (including the condition and manageability of the properties and the enquiries by the alienee), the Appellate Court concluded the trial Judge's finding on legal necessity was incorrect.

Holding and Implications

HOLDING: The Appellate Court allowed the appeal, set aside the judgment and decree of the learned Subordinate Judge, and held that the sale-deed Ext. B-5 of 1-8-1943 was valid and binding (i.e., the alienation was justified). The appeal was allowed with costs throughout payable by the plaintiff-respondent.

Implications:

  • Direct effect on the parties: The trial Court's decree declaring the sale void as against the reversioners was overturned; the purchaser's title under Ext. B-5 was upheld for the properties described therein, and the plaintiff-respondent was ordered to pay costs.
  • On statutory-contention and precedent issues: The Court indicated it was unnecessary to decide the arguments based on Section 14 of Central Act XXX of 1956 or Section 43 of the Transfer of Property Act in view of its merits-based decision. The Court also stated its adherence to the earlier Division Bench decision in Thailambal Ammal v. Kesavan Nair when addressing related statutory contentions, and declined to depart from that view.
  • No new wide-ranging legal precedent was announced by the Appellate Court beyond its conclusion on the facts: the decision rests on the factual finding of legal necessity and bona fide inquiry by the purchaser and the insufficiency of the trial Court's contrary emphasis.
H.G.P

Disposition recorded in the opinion: "Appeal allowed." (The Appellate Court allowed the appeal and ordered costs.)

Show full summary ...

    Chandrasekhara Iyer And Another v. Sivaramakrishna Iyer And Another

    The Judgment of the Court was delivered by

    Vaidialingam, J.:— This is an appeal by the 1st defendant against the decree and judgment of the learned Subordinate Judge, Palghat in O.S 13 of 1951.

    2. The suit was for a declaration that the alienation dated 1-8-43 by the 2nd defendant in favour of the 1st defendant was not valid and binding upon the reversioners to the estate of deceased Srinivasa Iyer, after the life-time of his widow, the 2nd defendant. The plaintiff and the 3rd defendant are the divided brothers of one Srinivasa Iyyar, the deceased husband of the 2nd defendant. Srinivasa Ayyar was an employee of the Central Bank of India and he died in October, 1942.

    3. The 2nd defendant, who is a childless widow of the said Srinivasa Ayyar, sold some items of properties on 1-843 to the 1st defendant for discharging the debts incurred by her deceased husband. The suit itself was for a declaration that the said alienation is not btading on the reversioners namely, the plaintiff and the 3rd defendant.

    4. The plaintiff's case was that the recitals in the sale deed dated 1-8-43 were all nominal recitals and that there were absolutely no debts to be discharged when Srinivasa Ayyar died. Further, it was stated that the properties had been sold for a grossly inadequate price. It was also contended that the 2nd defendant, as the widow of the deceased Srinivasa Ayyar, got Provident Fund amount from the Central Bank and as such, there was no necessity for making alienation of the suit properties.

    5. The 1st defendant, the purchaser, contended that the recitals about the debts mentioned in the sale deed in his favour were all true and binding debts. He also pleaded that he has actually discharged those debts which the widow was bound to do. It was further pleaded that he made very honest and bone fide enquiries and satisfied himself that the widow had no other way of discharging the debts. He finally contended that the properties were purchased by him at the correct market price and the plaintiffs allegations of gross under-valuation were not correct.

    6. The widow of Srinivasa Ayyar, who was the 2nd defendant, also filed a written statement standing by the transaction of sale executed by her in favour of the 1st defendant. She contended that the house which was sold was a very dilapidated one not fetching any substantial rent and she also stated that she had come away to Trichur and as such, there was no necessity for owning that dilapidated house. Regarding the lands that were sold, she has also stated that only those properties which were Kanom and whichs were fairly difficult to manage that were sold away.

    7. Regarding the debts, she has given necessary facts to show that they ware genuine and binding debts incurred by Srinivasa Ayyar and subsisting on his death. She further pleaded that in order to have a peaceful life after the death of her husband she squared up the dispute with the 3rd defendant who was one of the creditors and ultimately, there was a sale of the properties for the discharge of the binding debts of Srinivasa Ayyar. Regarding the Provident Fund no doubt, she claimed a special right in those funds for herself. She also pleaded that the properties were sold after making due enquiries about the market value prevailing at that time.

    8. Though the genuineness of the debts stated in the suit document was challenged in the plaint, during trial the plaintiff did not dispute those debts. The learned Judge also has considered the evidence and come to the conclusion that the debts mentioned therein are true. The learned Judge also found as a fact about the discharge of those debts by the 1st defendant, as part of the sale consideration for the suit document Ext. B-5. Even though the plaintiff challenged the adequacy of the price for the sale-deed, in his plaint, he has conceded before the trial Court that he is not challenging that aspect of the case. But the learned Judge held that the debts of Srinivasa Ayyar could have been discharged by the 2nd defendant from and out of the Provident Fund amount, without alienating the suit properties. In this view, he held that there was no legal necessity for sale of the properties by the 2nd defendant to the 1st defendant.

    9. In this view, the learned Judge came to the conclusion that the sale-deed Ex. B-5 is not binding on the reversioners and decreed the suit as prayed for with costs.

    10. In appeal before us Mr. T.N Subramonia Ayyar, learned counsel for the appellant, attacked the finding of the trial Court on the validity of the sale. He also based a contention relying upon Section 14 of the Central Act XXX of 1956, which has come into force on the 17th June, 1956 during the pendency of this appeal. He also contended that the principles of Section 43 of the Transfer of Property Act will have to be applied in this case and the alienee declared to have full, title to the properties by virtue of Central Act. XXX of 1956.

    11. Regarding the contention based upon the Hindu Succession Act XXX of 1956, it is enough to state that a Division Bench of this Court in the decision reported in Thailambal Ammal… v. Kesavan Nair…., 1957 Ker LT 344 : ILR (1957) Kerala 287 : (AIR 1957 Kerala 86) (A), has held that if the female owner had sold away property, in which she had only limited interest, before the Act came into force and put the vendee in possession, she could, in no sense be regarded as “possessed” of the property when the Act came into force. This decision is directly against the contention of Mr. Subramania Ayyar. The learned Judges in that case have followed a decision, of the Division Bench of the Andhra High Court reported in Venkayamma v. Veerayya, 1956-2 Andh WR 988 : ((S) AIR 1957 Andh Pra 280) (B). There is also an article to the same effect in 1956-2 Mad LJ 59 at p. 66 : Article in 1956-2 Mad LJ The learned counsel has drawn our attention to the decisions reported in Gosta Behari Bera v. Haridas Samanta, 61 Cal WN 325 : ((S) AIR 1957 Cal 557) (C); Hari Kishen v. Hira, (S) AIR 1957 Punj 89 (D); Laxmi Debi v. Surendra Kumar (S) AIR 1957 Orissa 1 (E); Kamala Devi v. Bachulal Gupta, (S) AIR 1957 SC 434 (F). If the Supreme Court has definitely held one way or the other in the decision last mentioned, we would-be bound by it. But the Supreme Court did not give a final decision on the same. As at present-advised, we do not see any reason to change the view taken by this Court in ILR 1957 Kerala 287 :(AIR 1957 Kerala 86) (A).

    12. It is unnecessary to deal, however, either with the contention based on the said Section 14 of the Central Act or about the applicability of Section 43 of the Transfer of Property Act, in the view that we-take on the merits of the appeal.

    13. Mr. N. Sundara Ayyar, learned counsel for plaintiff-respondent supported the judgment of the trial Court mainly on grounds of availability of the Provident Fund Amount with the widow and absence of proper enquiries by the alienee.

    14. But we are satisfied that the approach-made by the learned Judge in coining to the conclusion that he arrived at is not correct. He has not really given due weight to the evidence on record regarding the enquiries made by the 1st defendant and the necessity of the sale of the items covered by the sale deed. The learned Judge has been very much carried away by the single circumstance that the 2nd defendant was having the Provident Fund amount in her hands and that she could have liquidated the debts with that money. But the learned Judge has not really considered the other material evidence in the case to the effect that the suit properties were in an out of the way place and the Provident Fund amount, has been to a large extent, utilised for the building of a residential house for the 2nd-defendant at Trichur where she could have the benefit of assistance of the members of her family, including her brother. These are all points which have not been adverted to by the learned Subordinate Judge and we are not able to accept his finding on this point.

    15. As stated earlier, now there is no dispute about the genuineness of the debts mentioned in Ex. B-5 as also about their having been-properly discharged by the 1st defendant. There is also no dispute about the adequacy of the price fetched for these properties under Ex. B-5. All these matters being beyond controversy, the only question that arises is whether the alienation of the properties was justified in the circumstances and binding on the reversioners.

    16. The sale-deed is dated 1-8-1943 and is Ex. B-5 in these proceedings. It comprises of two schedules, Schedule A being a house and Schedule B comprising 4 items of small pieces of agricultural lands in the husband's village. The document itself states that the house in Schedule A was getting only a rent of Rs. 6/- and was let to a school teacher of the Koduvayur High School. The B Schedule properties appear to be all Kanom properties end outstanding in the possession of a tenant who was paying a rent of 120 paras of paddy per annum.

    17. D.W 2, an advocate of fairly good standing at the Bar, and who is the son of the 1st defendant has stated that the house was very old and dilapidated. There has been absolutely no cross-examination at all of this witness by the plaintiff on this point. It is also in his evidence that the 2nd defendant still possesses Jenm properties yielding about 380 paras of paddy. This witness also states that the 2nd defendant has built a house at-Trichur with the Provident Fund amount. His evidence is also to the effect that he was not aware of the 2nd defendant having got any Provident Fund amount.

    18. The receipt of Provident Fund amount from private firms is not of such a universal practice. In fact, Mr. K.S Narayana Ayyar, who is a very leading practitioner of Palghat and who was a party in the negotiations regarding this suit transaction, has given evidence as D.W 3. He has stated that some companies give and some companies do not give Provident Fund to their employees. He has also given evidence that he was not aware of the receipt of any Provident Fund by the 2nd defendant. Another very important matter that emerges from his evidence is that when he went to Trichur to get Ext. B-5 signed by the 2nd defendant on 1-8-1943, he saw her in her own house which was just occupied by her. Srinivasa Ayyar died in or about October, 1942 and the widow, the 2nd defendant got the Provident Fund amount of Rs. 8,000 on 31-10-42 as evidenced by Ext. A-2.

    19. Evidently after the death of Srinivasa Ayyar and having no further interest in the village of her husband, she has left that village and come over to her brother at Trichur. This is quite natural especially in the case of a childless widow to revert back to her own family after her husband's death. Immediately after her coming over to Trichur, she has been utilising the major portion of the Provident Fund amount for the construction of a house of her own for her comfortable living near her brother at Trichur. This is also quite natural. After all when fate has been very unkind to her in other respects, there is nothing wrong in her desire to have at least the other material comforts given to her in life. The evidence of the two advocates D.Ws 2 and 3 on this point have not been materially challenged. It would have been better if the 2nd defendant had also let in some positive evidence about the construction of the house, but we do not feel that this is in any way fatal to her case.

    20. D.W 3 has also spoken to the leading part taken by him in the matter of the negotiations connected with Ext. B-5 and also to the settlement that he effected ultimately with the 3rd defendant who was a creditor of the deceased Srinivasa Ayyar, as also his own brother. He has stated about the enquiries made by him and also about the properties offered for sale. The evidence of D.W 2 and D.W 3 and especially that of D.W 3, leaves no room for doubt that the 1st defendant, through his son, D.W 2, and through the latter's father-in-law D.W 3 has made prudent and careful enquiries about the necessity for the sale and has also satisfied himself about the absence of any other manner of discharging the debts.

    21. The amount of Provident Fund available with the 2nd defendant has been, in our opinion, satisfactorily explained as having been substantially utilised for the house at Trichur. Even otherwise, we are perfectly satisfied that the widow, the 2nd defendant was perfectly justified in parting with the dilapidated house and the Kanom properties which were situated far away and the management of which must have been very difficult. As a matter of prudence and convenience, she was absolutely justified in effecting the transaction that she did under Ext. B-5.

    22. The learned Judge has over-emphasised some of the minor points and put them against the 1st defendant. We feel that he was not really justified in doing so. As stated earlier, there was a legal necessity for the sale and the evidence on record conclusively shows a bona fide and honest enquiry made by the alienee namely, the 1st defendant. In the result, the judgment and decree of the learned Subordinate Judge are set aside and the appeal is allowed with costs throughout payable by the plaintiff-respondent.

    H.G.P

    23. Appeal allowed.

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    Comments

    Chandrasekhara Iyer And Another v. Sivaramakrishna Iyer And Another
    (Oct 21, 1957)