General Surgical Corporation by its Proprietor T. George v. Rao Bahadur Allathoor Nathamuny Chetty Charities by trustees A. V. Namperumal Chetty
1978-07-05
G.RAMANUJAM, T.RAMAPRASADA RAO
body1978
DigiLaw.ai
JUDGMENT Ramaprasada Rao, CJ.-These two appeals are connected. O.S.A. No. 83 of 1977 is directed against the order of V. Ramaswami, J., in Application No. 2960 of 1977 and O.S.A. No. 82 of 1977 is against the order of the same learned Judge in Application No. 2921 of 1977 both being application in C.B. No. 128 of 1976 on the Original Side. Though the applications spring from a civil action, the proceeding was formally marked as a suit, as it is the convention of this Court to mark originating summons taken out under Order 13 of the Original Side Rules of this Court as a regular suit, and it was in that connection the action came to be numbered as C.S. No. 128 of 1976. Admittedly the property in question belonged to Rao Bahadnr Allathoor Nathamuny Chetty Charities. It bears municipal door No. 495, Poonamallee High Road and is of an extent of 311 grounds. This was sought to be sold by the trustees, For that purpose they entered into an agreement with the appellant on 16th April, 1976. Inter alia the agreement provided that the appellant should pay Rs. 10,000 as advance and purchase the property for a consideration of Rs. 5,00,000 and that he should complete the sale within a period of three months from the date of the agreement, failing which the advance of Rs. 10,000 shall stand forfeited. It was also provided that, in case the charities failed to complete the contract of sale, it should return the advance, together with interest at 12 per cent per annum. Armed with such an agreement with the appellant, the trustees came to Court with the originating summons under Order 13, rule 1 (f) and Order 13, rule 2 (a) of the Original Side Rules. They appraised the Court, in the first instance, of their proposal to sell the property as above to the appellant, and the Court granted permission to the trustees to sell the property by its order dated 28th April, 1976. Thereafter, from time to time, the appellant was seeking for time for the performance of his part of the obligations under the contract. Time for the performance of the contract was mutually extended till 26th July, 1976. Soon thereafter the Tamil Nadu Urban Land Ceiling Act came into force in August, 1976. This again prompted the appellant to seek for extension of time.
Time for the performance of the contract was mutually extended till 26th July, 1976. Soon thereafter the Tamil Nadu Urban Land Ceiling Act came into force in August, 1976. This again prompted the appellant to seek for extension of time. At this stage we may also mention that the appellant, under the contract of sale, was at liberty to undertake levelling of the ground, filling up of ditches etc., and demarcate the property for the purpose of carving out building sites therefrom. The appellant could not complete the contract and was apparently negotiating with the trustees even after the lapse of the period of three months which was the outer limit for the performance of the reciprocal obligations of the parties under the agreement dated 16th April, 1976. This therefore provoked the trustees to write a letter dated 25th September, 1976, as under: “I have been instructed to inform you on behalf of Rao Bahadur Allathoor Nathamuni Chetti Charities, the following: 2. That in respect of your client's agreement with the Charities to purchase premises No. 495, Poonamallee High Road, Madras, though my client obtained necessary orders before 30th April, 1976 and your client agreed to complete the sale transaction within 3 months from 16th April, 1976, your client, has not chosen to complete the sale in spite of your assurance to complete it before July. Two months have passed since. But the sale is not completed in spite of completion of other formalities. My client hopes that your client would complete the sale within 10 days, the time of grace allowed at your client's request. Other wise my client will be constrained to enforce the terms of the agreement. 3. The trustees reminded the appellant of his failure to fulfil the obligations undertaken by him under the contract of sale and expected that he would complete the sale within 10 days’ time which they characterised as ‘grace period’ which they were prepared to allow at the appellant's request. Nothing further was done. Thereafter on 5th October, 1976, finding that the appellant was not inclined to respect his part of the contract, the trustees again wrote as follows: Ref: Sale of bungalow No. 495, Poonamallee high Road, Madras-Regarding purchase by your clients-Your client's agreement dated 16th April, 1976.
Nothing further was done. Thereafter on 5th October, 1976, finding that the appellant was not inclined to respect his part of the contract, the trustees again wrote as follows: Ref: Sale of bungalow No. 495, Poonamallee high Road, Madras-Regarding purchase by your clients-Your client's agreement dated 16th April, 1976. With reference to the above transaction you have taken all documents relating to the above bungalow together with the probated will and codicil copy of late Rao Bahadur A. Nathamuny Chetty on 12th May, 1976. Kindly return the said will and codicil copy to the bearer of this letter Mr. A. Srinivasalu, since the same is required by our bankers. Kindly treat this as most urgent and comply to our request. They wanted the appellant to return some of the title deeds (which were probably more important documents, and which the trustees wanted to have custody of), and called upon him return these documents. There was no response. It appears that again on 21st December, 1976, the trustees wrote the following letter by registered post: “Sale agreement dated 16th April, 1976-495, Poonamallee High Road, Madras-600 084. The title deeds relating to our above bungalow has been handed over to your advocate Sri. P.S. Lakshmanan by our advocate, Sri T.S. Rangarajan, and on 16th November, 1976. Our advocate has written to your advocate for the return of the documents. Till this day the title deeds have not been returned to our advocates or to us. We regret this irresponsible attitude taken by you and your advocate. We therefore call upon you to return the documents within 48 hours from the receipt of this notice to you, failing which we will be taking criminal action against you for the recovery of the title deeds. Further in our letter dated 28th July, 1976 to your advocate we have clearly stated that the trustees do not propose to give further time for completing the sale than 31st July, 1976, failing which the advance amount stands forfeited. We reiterate the stand taken by us and the agreement is cancelled hereby”. The trustees reminded the appellant of their earlier attitude and also warned him that the advance stood forfeited and the agreement was cancelled. In answer to this letter no action was taken by the appellant at any rate, no reply has been produced before us to show that the appellant, as a “prospective buyer,” (as Mr.
The trustees reminded the appellant of their earlier attitude and also warned him that the advance stood forfeited and the agreement was cancelled. In answer to this letter no action was taken by the appellant at any rate, no reply has been produced before us to show that the appellant, as a “prospective buyer,” (as Mr. Doha calls him) did ever evince any interest, subjectively at least, that he was interested in the bargain. Before us, we sought for a clarification from counsel as to when the title deeds were returned and whether there was any correspondence thereafter, between the appellant and the trustees touching upon the subject-matter. No such correspondence was produced. We also asked for information whether the appellant at any time entered upon the premises for filling up ditches, making roads, sub-dividing the property so as to convert it into suitable building sites, whether he incurred any expenditure in that behalf and whether such expenses were vouched or refliected in any regularly kept account books. No such record has been produced in spite of our asking for such production of evidence in support of any activity on the part of the appellant in relation to the property or the agreement of sale. 4. It was in these circumstances that in 1977, to wit, on 22nd August, 1977, a fresh application was taken out by the trustees in the very same originating summons seeking for a direction to sell the property to another person other than the appellant. V. Ramaswami, J. passed an order granting such a permission. It is to set aside this order and for impleading the appellant as a party to the proceedings in which this Court rescinded-if such an expression could be used at all-its earlier order, that the present application were made giving rise to the appeals before us. Application No. 2960 of 1977 was made by the appellant for impleading himself as a party to Application No. 2453 of 1977 in which the earlier order passed by this Court on 28th April, 1976 was altered and fresh permission was granted to the trustees to sell the property to another party other than the appellant. Application No. 2921 of 1977 in the same originating summons was filed for setting aside the order to the Court made in Application No. 2453 of 1977.
Application No. 2921 of 1977 in the same originating summons was filed for setting aside the order to the Court made in Application No. 2453 of 1977. V. Ramaswami, J. dismissed both the applications The learned Judge expressed the view that the appellant could by no stretch of imagination be said to be a person who had an interest in immovable property which is the subject-matter of the discussion and that, in the absence of such a right which he could agitate at that point of time before him, the appellant was not a necessary party. He also held that, as in the originating summons the trustees only sought for permission to sell the property, the appellant, or any other person, who has been rightly characterised as a prospective buyer, cannot project any right, title or interest in the property. In equity, the learned Judge observed that the trustees could not wait for a decision on the part of the appellant indefinitely and that, as the agreement only provided for the completion of the sale within a period of three months from 16th April, 1976 and as it could not be completed as contemplated, the appellant was neither a proper nor a necessary party to the proceedings. Consequently he refused to set aside the earlier order granting fresh permission to the trustees to sell the property to an independent party. 5. Mr. Dolia in appeal before us contends that the Chapter on Originating Summons in the Original Side Rules of this Court being a special procedure, ought to be strictly construed. In that perspective he submits that Order 13, rule 1 (f) read with Order 13 rule 2 of the said Rules contemplated that in a case, where trustees come up to Court for permision to sell the properties and permission is granted to them to sell the properties, that the prospective buyer, who might have entered into an independent agreement to purchase the property from the trustees, does secure an interest in the property by reason of such sanction of Court and that therefore such an order cannot be modified, rescinded or superseded under any circumstances without that party, who was thought of as a prospective buyer, being heard.
Secondly, it is submitted that, once an order is made enabling the trustees to sell the property, a right is automatically created in favour of the prospective buyer, such as the appellant herein and that, as the rights which are created under due process of law contemplated civil consequences which are to be respected, the application by which the appellant wanted himself to be impleaded as a party to the proceedings was only to assert such right alleged to have accrued to him and that disregard of such civil consequences or non-observance or disrespect of such alleged right in him cannot be contemplated without the appellant being heard. Reliance was placed on the decisions of the Supreme Court in Nookala Sethuramiah v. Kottaiah Naidu1 and Mohinder Singh Gill v. Chief Election Commissioner2 dealing with civil consequences, and their scope. 6. We are unable to agree with the learned counsel for the appellant. Though originating summons is a creature of a special procedure prescribed by the Original Side Rules, which contemplate certain methodology by which trustees of trust properties can, without incurring heavy expenditure by way of court-fee etc., move the Court and secure orders relating to matters connected with the administration of trust property, yet in a matter like the one under consideration we are afraid that no vested right in the appellant has ever been affected. When the trustees came forward with the application for permission to sell the property, under Order 13, rule 1 (f) read with Order 13 rule 2 of the Original Side Rules, they wanted to fortify themselves with the permission of the Court to sell the property at an agreed price to the appellant. If the Court had refused such a permission no right could ever be thought of as having been acquired by or having become vested in a person like the appellant, at that stage. Conversely therefore if the Court grants permission to the trustees to sell the property, even as no rights can flow from such permission ipso facto granted by the Court on an application suo motu made by the trustees under the circumstances stated above.
Conversely therefore if the Court grants permission to the trustees to sell the property, even as no rights can flow from such permission ipso facto granted by the Court on an application suo motu made by the trustees under the circumstances stated above. Whatever rights the appellant might have under the written agreement entered into as between himself and the trustees, as is seen from the agreement dated 26th April 1976, he cannot, in our view, project a right, known to law, by reason of the permission granted by the Court to the trustees to sell the property, which permission was sought under the special procedure prescribed by the Original Side Rules as stated above. If therefore no right known to law flowed from the order of this Court made on 28th April 1976, no further discussion is necessary. 7. Mr. Dolia next sought to persuade us to accept the contention that at least an inchoate right should have vested in the appellant at or about the time of or soon after passing of the order of the Court granting permission to sell the property. Assuming that such a right did flow-which we very much doubt-from the permission granted by the Court to the trustees to sell the property, what is the content of that right? The right, if any, which the appellant can claim is referable to the written agreement dated 16th April 1976. Under that agreement he had to complete the contract within three months; and he had to pay the balance of Rs. 4,90,000, secure the sale deed and complete the transaction. He never moved in that direction at any time, nor does the record before us disclose any bona fide intention on his part in that regard. On the other hand, the various circumstances brought to our notice speak to the contrary. We have already referred to the correspondence that passed between the appellant and the trustees after this Court granted permission to the trustees to sell the property to the appellant in accordance with the terms of the agreement dated 16th April, 1976. The only argument put forward before us is that by reason of the intervention of the Tamil Nadu Urban Land Ceiling Act the appellant could not proceed further. He could have said so; but he did not.
The only argument put forward before us is that by reason of the intervention of the Tamil Nadu Urban Land Ceiling Act the appellant could not proceed further. He could have said so; but he did not. On the other hand, when the trustees became impatient and asked for the return of the documents, even in 1976, the appellant would not return them, in the first instance. He had to be reminded about it. In December, 1976, the trustees wrote a very provocative letter seeking for the return of the documents and informing him that they had already forfeited the advance and cancelled the agreement. One knows not when the title deeds were returned and what title deeds were returned. We are not, however, concerned with this aspect in these proceedings. Suffice it, however, to say that even in 1976 the parties understood that the agreement between the appellant and the trustees was a closed affair and that no rights flowed from such agreement to either of the parties. This is because the trustees were emphatic that they had already forfeited the advance, and even then the appellant would not write to the trustees that such an attitude on their part was against the spirit of the agreement and the understanding between them. What is urged before us is that from time to time the appellant was impressing upon the trustees his bona fides to complete the transaction. Except this ipse dixit of the appellant, there is no evidence aliunde to sustain this contention. In these circumstances, therefore, we are unable to accept the contention that, merely because an agreement had been entered into and that was followed up by the permission granted by the Court to the trustees to sell the property to the appellant under the aforesaid agreement, certain rights automatically flowed therefrom and that non-observance or disrespect of such alleged rights led on to certain civil consequences. The principle in Nookala Sethuramiah v. Kottaiah Naidu1 is applicable to a case where a party is denied audience in a case where he ought to have been heard.
The principle in Nookala Sethuramiah v. Kottaiah Naidu1 is applicable to a case where a party is denied audience in a case where he ought to have been heard. But in a case where his presence is not necessary and he is neither a necessary nor a proper party, then his non-impletion either at that stage or at any stage thereafter cannot be understood or said to be one resulting in the affectation of rights and an impingement of civil consequences. No doubt, it is well established that a person, who has not been made a party to a proceeding may still appeal with the leave of the appellate Court, provided that he might have been properly made a party to the proceedings. This is the principle of the decision in Re “ B” an infant2 which was approved by the Supreme Court in Nookala Sethuramiah v. Kottiah Naidu.1 The question in the instant case is whether the appellant can be characterised as a person who could have been properly made a party to the proceedings in the action under consideration. We have already expressed the view that he was neither a proper nor a necessary party at the time when the trustees applied for permission to sell the property. He cannot therefore be said to be such a person even at the time when the second permission was sought by the trustees to sell the property which the appellant would not purchase within the time provided under the contract dated 16th April 1976. The learned Judge was therefore right when he said that, by reason of the mere fact that the appellant had advanced a sum of Rs. 10,000 towards the agreed price, he could not be said to have acquired an interest in immovable property which would entitle him for audience at all times in all proceedings undertaken by the trustees in the matter of the sale of the trust property. It all depends on the facts of each case. In fact, the learned Judge gave an opportunity to the appellant to work out his rights, if any, in an independent civil action, and we are not making any observations to the contrary in these appeals. We, however, confirm the decision of the learned Judge that, in the circumstances, the trustees cannot be asked to wait indefinitely land be at the mercy of the appellant.
We, however, confirm the decision of the learned Judge that, in the circumstances, the trustees cannot be asked to wait indefinitely land be at the mercy of the appellant. He was of the view, and rightly in our opinion, that the appellant is neither a proper nor a necessary party to the proceedings. The application to implead the appellant was therefore rightly dismissed, and the consequential order which followed was also rightly made. The appeals fail and are accordingly dismissed. There will be no order as to costs. 8. We may mention that we issued notice to the person who is willing to purchase the properly as a result of the second permission granted by this Court. In the presence of that intending purchaser also the appeals were heard. R.S. ----- Appeal dismissed.