Vishnu Nambudiri v. Venkitachalam Iyer — 1954 DIGILAW 90 (KER)

Judgment :- 1. This is an appeal preferred by the plaintiff whose claims in respect of the suit property were disallowed by the lower court. The basis of the plaintiff's claim of title to the property is the sale deed Ext. F dated 27.7.1110 executed in his favour by the District Judge at Kottayam on behalf of the defendant in O.S. No. 86 of 1104 on the file of that court. That was a suit instituted by the present plaintiff against the defendant in that suit for a decree for specific performance of a contract for sale of the identical property. Ext. D is copy of the plaint and Ext. E copy of the decree in that case. The sale deed Ext. F happened to be executed by the court because the defendant had failed to execute the conveyance as per the terms of the decree passed in that suit. The following facts disclosed by the pleadings in the case will give an idea as to how the defendant in that case purported to execute the contract for sale of this property as its owner. 2. The plaint item along with other properties originally belonged to one Narayana Pillai Gopala Pillai of Chemanthara House and he had mortgaged these properties in favour of one Venkitachalam Iyer Neelakanta Iyer, the father of defendants 1 to 8, on 24.2.1104. For recovery of the amount due under that mortgage Neelakanta Iyer filed the suit O.S. 3/1107 copy of which is Ext. G. In the meanwhile, Narayana Pillai Gopala Pillai, the owner of the properties, had executed a sale deed dated 28.4.1104 in favour of one Krishna Pillai Parameswaran Pillai of Manaloor House. The debt due under the decree O.S. No. 642/1100 which one Ramakrishna Pillai had obtained against Narayana Pillai Gopala Pillai, had been directed to be discharged by the vendee Krishna Pillai Parameswaran Pillai. It was this Parameswaran Pillai who executed the agreement for sale of the suit property in favour of the present plaintiff on 3.5.1104. The consideration stipulated of Rs. 2,500 out of which Rs. 844 was paid at the time of the agreement. The failure to execute the sale deed as per the terms of the agreement led to the institution of the suit O.S. 86/1104 which was ultimately compromised by the parties. The decree Ext. E was passed in terms of that compromise. The consideration stipulated of Rs. 2,500 out of which Rs. 844 was paid at the time of the agreement. The failure to execute the sale deed as per the terms of the agreement led to the institution of the suit O.S. 86/1104 which was ultimately compromised by the parties. The decree Ext. E was passed in terms of that compromise. It may be stated in this connection that the decree-holder in O.S. 3/1107 had not been made a party to the plaintiff's suit O.S. 86/1104 while Parameswaran Pillai, who had executed the agreement for sale in favour of the present plaintiff, had been made a party to O.S. 3/1107. In due course the decree in O.S. 3/1107 was put into execution and the plaint property was brought to sale on 14.6.1108 and purchased by the decree-holder himself in satisfaction of his claims under the decree. He also obtained delivery of the property through court on 16.11.1108. Ext. I is the sale certificate in that case. It was long after the completion of the execution proceedings in that case that the sale deed Ext.F happened to be executed in favour of the present plaintiff on the strength of the decree Ext. E. When he attempted to obtain possession of the property the auction-purchaser in O.S. 3/1107 obstructed and accordingly the plaintiff applied to the court to put him in possession of the property after removing the obstruction. That application was dismissed on 28.5.1117 after upholding the obstructor's claim for possession. That order was confirmed by the erstwhile Travancore High Court by its judgment in A.S. No. 651/1118. Ext. J is copy of that judgment. 3. The position taken by the plaintiff in the present suit is that the decree and the execution proceedings in O.S. 3/1107 as also the subsequent orders passed against him will not in any way affect his title to the property obtained under the sale deed Ext.F. According to him the proportionate amount chargeable on the plaint property by virtue of the mortgage deed which formed the basis of the decree in O.S. 3/1107 will not exceed Rs. 1,000 and that on payment of this amount to the defendants who are the legal representatives of the auction-purchaser in that case he is entitled to get recovery of possession of the property from them. 1,000 and that on payment of this amount to the defendants who are the legal representatives of the auction-purchaser in that case he is entitled to get recovery of possession of the property from them. From the date of deposit of that amount the plaintiff has claimed mesne profits also at the rate of 250 paras of paddy per year. By way of alternative relief, he has claimed a charge on the property to the extent of Rs. 844 paid by him to Krishna Pillai Parameswaran Pillai under the agreement for sale dated 3.5.1104. These claims were resisted by the 3rd defendant who contended that the plaintiff is not entitled to any of the reliefs claimed in the plaint and that the entire title to the property passed on the auction-purchaser in O.S. 3/1107. It was also contended that neither the agreement for sale taken by the plaintiff subsequent to the mortgage which was the basis of the decree in O.S. 3/1107 nor the decree in O.S. 86/1104 which culminated in the execution of the sale deed Ext. F, could be availed of by the plaintiff as conferring any title on him to the property as against the auction-purchaser in O.S. 3/1107. The lower court upheld these contentions and dismissed the suit. The correctness of that decision is challenged by the plaintiff in this appeal. 4. The plaintiff's case is that by virtue of the agreement for sale executed in his favour on 3.5.1104 by Krishna Pillai Parameswaran Pillai who had become the purchaser of the equity of redemption of the plaint property under Ext.C dated 28.4.1104, he had acquired an interest akin to a charge on this property and that therefore he was a necessary party to the suit O.S. 3 of 1107 instituted by Venkitachalam Iyer Neelakanda Iyer who had an earlier mortgage dated 24.2.1104 in respect of the same property. The answer to this contention is given by the last clause of S. 54 of the Transfer of Property Act. That clause states that a contract for the sale of immovable property does not of itself create any interest in or charge on such property. The answer to this contention is given by the last clause of S. 54 of the Transfer of Property Act. That clause states that a contract for the sale of immovable property does not of itself create any interest in or charge on such property. In view of such a clear statutory provision it is idle to contend that the plaintiff had acquired a charge on the property by virtue of the agreement for sale in his favour and that in the first mortgagee's suit for foreclosure the plaintiff was a necessary party so that there could be an effective sale of the property in that suit. Unless and until the agreement for sale in favour of the plaintiff fructified into a sale deed, he could not claim to have acquired any title to the property. Till that stage was reached the person who had contracted to sell the property to him was the proper person to represent the equity of redemption of the property and the decree obtained by the mortgagee with that person on record was a perfectly valid decree in execution of which the title to the property could validly be sold. This position is unaffected by the mere fact of the plaintiff's having instituted a suit for specific performance of the contract for sale and of having obtained a decree in his favour. The decree Ext. E which the plaintiff had obtained was based on a compromise between himself and the defendant in that suit. Such a decree is also a creature of the agreement between them and as such it has no greater force or significance than the earlier contract between them. The decree embodies in it the contract between the parties with the command of the court superadded to it enabling the plaintiff to have the agreement enforced through court. All the same title to the property continued to remain in the defendant himself, and such title passed on to the plaintiff only when the sale deed was executed on the defendants' behalf by the court. The title thus obtained does not relate back to the date of the contract for sale. In Jahar Lal v. Bhupendranath (A.I.R. 1922 Calcutta, 412) a contrary view appears to have been taken. That decision was followed in Dina v. Gujaba (A.I.R. 1926 Nagpur 95). The title thus obtained does not relate back to the date of the contract for sale. In Jahar Lal v. Bhupendranath (A.I.R. 1922 Calcutta, 412) a contrary view appears to have been taken. That decision was followed in Dina v. Gujaba (A.I.R. 1926 Nagpur 95). With all respect we have to differ from the view taken in those cases. These decisions were referred to and dissented from by the Nagpur High Court in Shewanti Bai v. Vizhwas Rao (1952 (XXXV) Nagpur Law Journal 406) where it was ruled that a decree for specific performance of an agreement for sale by itself was not effective to transfer title and that so long as the sale deed is not executed in favour of the successful party either by the defendant himself or by the Court, the title continues where it has before the passing of the decree. In the recent decision of this Court reported in Kochvareed v. Mariappa (A.I.R. 1954 Travancore-Cochin p. 10) the view taken is to the same effect. Consistent with this view it has to be held that the plaintiff did not acquire any title to or charge over the suit property until 27.7.1110 the date of the sale deed Ext. F in his favour. It follows therefore that when Neelakanta Iyer instituted the suit O.S. 3/1107 for the enforcement of his mortgage, he was not bound to implead the present plaintiff as a party to that suit. Krishna Pillai Parameswara Pillai who had contracted to sell the property to this plaintiff and who could therefore represent all the rights which he had agreed to convey, was impleaded as the 3rd defendant in that case as is seen from Ext. G decree. The sale of the property in execution of that decree with Krishna Pillai Parameswaran Pillai on record was a perfectly valid sale under which the entire rights over the property became vested in the auction-purchaser. If the plaintiff wanted to protect his rights under the contract for sale and to preserve the property to be conveyed to him in enforcement of that contract, it was for him to have intervened in the execution proceedings in O.S. 3/1107 and to have averted the court sale by paying off the mortgage debt. After having failed to do so, he cannot claim to have acquired a title to the property by virtue of the sale deed Ext. After having failed to do so, he cannot claim to have acquired a title to the property by virtue of the sale deed Ext. F which purported to convey Krishna Pillai Parameswara Pillai's title to the property nearly 2 years after such title had been effectively extinguished by the court sale in O.S. 3/1107. The rights of the auction-purchaser in O.S. 3/1107 which was a suit for enforcement of a mortgage could not in any way be affected by the plaintiff's suit O.S. 86/1104 for specific performance of the contract for sale or by the decree in that suit or even by the execution of the sale deed Ext. F, subsequent to such court sale. Even though the mortgage was already in existence, the plaintiff did not care to implead the mortgagee as a party to O.S. 86/1104 and hence the proceedings in that suit could not affect the mortgagee's rights. The lower court was therefore right in holding that under the sale deed Ext. F the plaintiff has not acquired any title to the suit property and that his claim to redeem the property on payment of the proportionate mortgage amount chargeable on this property under the mortgage deed dated 24.2.1104 in favour of Neelakanta Iyer is unsustainable. 5. It has next to be considered whether the plaintiff is to be given a charge on the suit property for the sum of Rs. 844 paid to Krishna Pillai Parameswaran Pillai under the contract for sale of the property. The contract was entered into subsequent to the mortgage dated 24.2.1104 and behind the back of the mortgagee. The mortgagee Neelakanta Iyer became the auction-purchaser of the property in enforcement of this mortgagee and as such it cannot be said that his interests in the property were acquired subsequent to the contract for sale to the plaintiff. It has not also been shown that the mortgagee or his legal representatives were aware of this contract at any time upto the court sale in O.S. 3 of 1107. Since that sale was in enforcement of the earlier mortgage, the part consideration paid under the latter agreement for sale cannot be declared charge on the property. The circumstances under which the compromise decree Ext. E was obtained and the sale deed Ext. Since that sale was in enforcement of the earlier mortgage, the part consideration paid under the latter agreement for sale cannot be declared charge on the property. The circumstances under which the compromise decree Ext. E was obtained and the sale deed Ext. F was brought into existence are also such as to show that the plaintiff is not entitled to any equity in his favour. It is too much to believe that the plaintiff was unaware of the existence of the mortgage dated 24.2.1104, in favour of Neelakanta Iyer when the agreement for sale was entered into and when the suit for specific performance was instituted. With full knowledge of the existence of the mortgagee's suit for redemption of the mortgage, Krishna Pillai Parameswaran Pillai permitted the compromise decree Ext. E to be passed in the suit for specific performance. Ext. III copy of the execution Diary in that suit shows that execution was started only after the property was sold in court auction in the mortgage suit. On 15.7.1110 the defendant in Ext. E case is seen to have agreed to the draft of the sale deed which had been produced by the plaintiff. Soon after the execution of the sale deed Ext. F, the defendant is seen to have filed an application in court on 14.11.1110 stating that he has no objection in the property being delivered over to the plaintiff. As a matter of fact the property had already been delivered over to the auction-purchaser in the mortgage suit as early as on 16.11.1108. The aforesaid facts lead to the irresistible inference that the parties to the decree Ext. E were colluding together and were sailing in the same boat to see if they could over-reach the auction-purchaser in the mortgage suit. The plaintiff who has been a party to such questionable conduct cannot claim any equity in his favour. For the consideration paid under the contract of sale, his legitimate remedy is against Krishna Pillai Parameswaran Pillai to whom the payment was made. But it is significant to note that he has not even been made a party to the present suit. Under these circumstances the lower court's decree disallowing the plaintiff's claim even to have the said amount declared as a charge on the property does not call for any interference. 6. In the result this appeal is dismissed with costs. Dismissed.