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1981 DIGILAW 209 (KAR)

MAHADEVAMMA v. B. S. LINGARAJU

1981-07-15

M.N.VENKATACHALIAH, N.R.KUDOOR

body1981
( 1 ) THIS Civil Revision Petition is referred to a Division Bench by Puttaswamy, j. as there is conflict of judicial opinion in the pronouncements on the point. Though the point is somewhat differently formulated in the order of reference, the question really is whether an intending-transferee under a contract for sale of immoveable property, who is put in possession of the property in part-performance of the contract, can, as plaintiff, bring an action for the 'possessory remedy of an injunction in protection of his possession against the transferor. In Shankargouda Hanumantha gowdav. Fatesab (1) and Muniyamma v. G. Channaiah (2) learned Single judges subscribe to the view that such an action cannot be maintained. But in Devaraja Mudaliar v. S. D. Lakshminagappa (3) another learned judge has held in favour of main- tainability of such an action. ( 2 ) THE relevant and material facts are these: petitioner is defendant-1 in O. S. 46 of 1979 on the file of the Civil judge, Madikeri. Respondents plaintiffs brought the suit for the specific enforcement of an agreement for sale dated 5:1. 79 allegedly executed by petitioner and her sons in their favour agreeing to convey the suit-property for a price of Rs. 10,000. It was further alleged that a sum of Rs. 5,000 was paid to the defendants under the agreement and that plaintiffs-respondents were put in possession of the property, pursuant to and in part performance of the said agreement for sale. In addition to seeking specific performance, plaintiffs also sought the relief of permanent injunction in protection of their alleged possession. The suit was, thus, for the said two reliefs. On an application, I. A. I. , filed by by the plaintiffs for a temporary injunction the trial Court granted the temporary injunction sought. The lower appellate Court has affirmed the injunction in appeal. We have beared Sri U. L. Narayana rao for petitioner and Sri H. B. Datar, learned senior counsel for respondents plaintiffs. ( 3 ) ONE of the contentions urged in this petition is that the equity of part performance under S. 53a of the transfer of Property Act , being a passive equity-figuratively expressed as a shield and not a sword the person claiming its benefit cannot as plaintiff, institute a suit even if it be merely to protect his possession. Pronouncements of two learned Single Judges support this view. Pronouncements of two learned Single Judges support this view. ( 4 ) THE Doctrine of part performance in England has its origin in Equity, when the common law remedy of damages was found inadequate. It was an innovation to relieve the hardship of the provisions of the statute of Frauds which by its 4th section provided that no action could be brought upon a contract for the sale of land unless the contract was in writing and signed by the party to be charged. Though the salutary object of the provision was to eliminate parol evidence and thus obviate the dangers of perjured evidence, the provision itself became an instrument of fraud by lending itself to the possibility of a vendor, who orally agreed to sell property, received the price and put the vendee in possession, himself later ejecting from the property the vendee who, in the absence of a written instrument, was helpless. S. 4 of the statute of Frauds was later repealed by S. 40 of the Law of Property Act, 1925. Sub-section (2) of that section gave statutory recognition to the doctrine of part performance. The doctrine as so statutorily assimilated is to the effect that though, owing to the absence of a written instrument the agreement cannot be relied on in a Court of Law, it is nevertheless enforceable specifically in equity by admitting parol evidence of the contract, provided the party has acted in part performance of the agreement. In England this equity is an 'active' equity and could be invoked in aid of a parol contract, and the acts of part performance need not necessarily consist of taking possession but included "any act". ( 5 ) IN India, before the amending act of 1929, the doctrine was invoked to take a document, requiring registration, out of the rigours of the transfer of Property and Registration acts under certain circumstances. In Mohamed Musa v. Aghore Kumar gnngoli (4) the doctrine was invoked in a case where under an unregistered razinamah, which was acted upon, recording a compromise between a mortgagor and mortgagee, where under the mortgagor agreed to execute a conveyance in regard to the property given, to the mortgagee in consideration of the mortgagee having released the property allowed to be retained by the mortgagor. Lord shaw referred to with approval the principle enunciated by Lord Selborne in Maddison v. Alderson (5) This view was followed in several cases in the High Courts (see Vizagapatam sugar Development Co. , v. Muthuramareddy (6 ). ( 6 ) HOWEVER, in G. H. C. Ariff v. Jadunath Majumdar (7) the judgment of the Calcutta High Court which followed Mohamed Musa's case was reversed and doctrine of part performance was held inapplicable in India. Lord Russell of Killowen said: "whether an English equitable doctrine should in any case be applied so as to modify the effect of an Indian statute may well be doubted; but that an English Equitable doctrine affecting the provisions of an English statute relating to the right to sue upon a contract, should be applied by analogy to such a statute as the Transfer of Property Act and with such a result as to create without any writing an interest which the Statute says can only be created by means of a registered instrument, appears to their Lordships, in the absence of some binding authority to that effect, to be impossible. " mohmed Musa's case was distinguished on the ground that at the relevant date there was no law which required registration of conveyances. This view was reiterated in Pir Bux v. Mohamed Tahar (8 ). ( 7 ) THERE was a "partial importation" of the English doctrine into S. 53a of the Transfer of Property Act introduced by the amending Act of 1929. The Select Committee adverting to the need for a provision of the kind, observed that they did not think that had arrived when the equitable doctrine can be safely abrogated in favour of a rigid application of the law of registration" as in its view,"ignorant transferees in this country who have partly performed the contract require a greater measure of protection than even a transferee in england". The English doctrine was said to be assimilated in the Indian statute only partially, because the act of part performance was limited to entry into a continuance in possession pursuant to the contract and the provision only envisaged a bar against the transferor from enforcing against the transferee any right respecting the property other than a right expressly provided by the terms of the contract. This it is said, created merely a passive equity. This it is said, created merely a passive equity. ( 8 ) THE present question is whether the transferee, as plaintiff, is entitled to invoke S. 53-A for the purpose of protecting his possession. Shankar- gouda's case is one where the plaintiff sought the possessory relief of injunction on the claim of tenancy of certain lands under an alleged grant to his father by the father of the defendants and further claimed that, later, the father of defendants had also executed an agreement to sell the land in favour of plaintiff's father. The plea of tenancy had been rejected by the Land-Tribunal. There was, apparently, no plea of part-performance. It was held: "if the plaintiff has been in possession of the land under such agreement, he can only resist the suit by his vendor for possession under Sec. 53a of the Transfer of property Act. But, the plaintiff cannot maintain a suit for possession or for injunction in respect of that land. Hence the Courts below were not justified in granting injunction in favour of the plaintiff. " (Underlining italics supplied) we are not, here, concerned with the first part of the observation touching a suit for possession. The reference to a suit for injunction is what we are now concerned with. The observations appear merely obiter. The Court was also not invited to a discussion of the authorities on the point. The next case referred to in the order of reference is Muniyamma's case (2 ). This case has merely followed Shankdraqouda's case (1 ). It was, however, observed:"where a person claims to be in possession of a property by virtue of an agreement to lease, in Delhi motor Company's case the Supreme court has ruled that Sec. 53-A of the Transfer of Property Act was a bar to such a person to claim any other right except the rights that are conferred under the agreement to lease or agreement to sell. In Shankargouda Hanumdnthagouda case (2) the learned Chief Justice examining a case in all fours evidently having regard to the principles enunciated by the Supreme Court in Delhi Motor Company's case, but without referring to the same, has stated the principle in these words. . . . " (then the passage from Shankargouda's case excerpted earlier was referred to) we think that advertance to the effect the decision in Delhi Motor Co. . . . " (then the passage from Shankargouda's case excerpted earlier was referred to) we think that advertance to the effect the decision in Delhi Motor Co. , v. U. A. Basrurkar (9) is somewhat inaccurate. In para 6 of the said judgment, Bhargava, J, speaking for the Supreme Court observed:"in these circumstances, an argument was put forward on behalf of the firm that, though this contract to lease had not been registered, the firm could claim possession under it in view of the provisions of s. 53-A of the Transfer of Property act, because, in this case the Company would be debarred from enforcing against the firm any right in respect of that property of which the firm had already taken possession, viz. , part of the showroom and a portion of the Balcony. "repelling this contention, it was held: in our opinion, this argument proceeds on an incorrect interpretation of s. 53a, because that section is only meant to bring about a bar against enforcement of rights by a lessor in respect of property of which the lessee had already taken possession, but does not give any right to the lessee to claim possession or to claim any other rights on the basis of an unregistered lease. S. 53a of the transfer of Property Act is only available as a defence to a lessee and not as conferring a right on the basis of which the lessee can claim rights against the lessor. This interpretation of S. 53a was clearly laid down by their Lordships of the Privy Council in Proboth Kumar Das v. Dantmara Tea Co. , 66 Ind. App. 293. The reference in the above passage to bar against the enforcement of rights except those conferred under the agreement is in the context of and in rela tion to the transferor. With respect, we think there is an inaccuracy in the reasoning in Muniyamma's case (2) in that the bar against enforcement of rights by the trnasferor appears to have been applied to the transferee. In Proboth Kumar Das v. Dantamara tea Co. , Ltd. (10) to which reference was made by the Suprems Court, the appellant before the Privy Council had in his favour an agreement for sale of a tea estate of which he was purusuant- iv put in possession. In Proboth Kumar Das v. Dantamara tea Co. , Ltd. (10) to which reference was made by the Suprems Court, the appellant before the Privy Council had in his favour an agreement for sale of a tea estate of which he was purusuant- iv put in possession. Respondent-defendant who claimed under a later registered instrument of sale, however, had been granted export quota rights; but had no actual possession. Plantiff brought a suit for declaration and for debarring the defendant from enforcing any right to the estate founding his claim upon S. 53-A of the T. P. Act. It was in the context of these facts, the privy Council said: in their Lordships' opinion, the amendment of the Law effected by the enactment of S. 53-A conferred no right of action on a transferee in possession under an unregistered contract of sale. Their Lordships agree with the view expressed by hitter, J. in the High Court that 'the right conferred by S. 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, Sri Dinshan mulla, as stated in Edition 2 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 transfer; it confers no active title on the transferee. " the above observations do not admit of being understood as from the position that the question whether the equity is being used as a shield or a sword, does not necessarily depend upon the array of parties but is essentially dependeni upon whether the action is a defensive action. In Devaraja Mudaliar v. S. D. Lakshminagappa (3) the learned Judge who decided it observed:"there cannot be any doubt that the Plaintiff can institute a suit for injunction against the defendants basing his suit u|s. 53-A of the Transfer of Property Act. 53-A is no doubt used as a shield and not as a sword. Simply because, he has instituted the suit as plaintiff, it cannot be said that he has used it as a sword it is still used as a shield to protect the possession. Hence, courts have ruled that such a suit is tenable. "the learned single Judge was, of course, not called upon and therefore had no occasion to refer to the authorities. Hence, courts have ruled that such a suit is tenable. "the learned single Judge was, of course, not called upon and therefore had no occasion to refer to the authorities. These are the conflicting views referred to in the order of reference. ( 9 ) THAT a suit of a transferee who is in possession in part performance u s. 53a for the possessory remedy of an injunction protecting his possession is a mere defence suit in which plaintiff is merely using the shield of passive equity is laid down in a number of pronouncements of the High Courts (See: Esaz Ali v. Fair dues Jehan (11); Ram Chander v. Maharaj Kunwar (12), Yenugu achayya v. Emaki Venkata Subba Rao (13); Akram Mea v. Secunderabad municipal Corporation (14); Maruti gurappa v. Krishna Bala (15) and ettapparambath Atiyandi v. Kaiprath kalandan (16 ). The words of the section, it has been held do not warrant a conclusion that the plaintiff, as such, is necessarily debarred from the benefit of the section. The true position was explained by subba Rao, C. J. (as he then was) in yenugu Achhayya v. Emaki Venkta subba Rao (13 ). "whether the transferee occupies the position of a plaintiff or a defendant, he can resist the transferor's 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 compelling him to go to a Court as Plaintiff. Doubtless, the right conveyed under the section can be relied upon 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. "in Maruti Gurappa v. Krishna Bala (17) Naik, J. subscribing to the above view said:"as against this preponderance of authorities Mr. Guttal relied upon the solitary ruling of the Orissa high Court (AIR 1952 Orissa 113) Padinalabha Panda v. Appalanarasamma. "in Maruti Gurappa v. Krishna Bala (17) Naik, J. subscribing to the above view said:"as against this preponderance of authorities Mr. Guttal relied upon the solitary ruling of the Orissa high Court (AIR 1952 Orissa 113) Padinalabha Panda v. Appalanarasamma. With respect I am unable to accept the view taken by the Orissa High Court for the simple reason that the learned judges have not examined S. 53-A of the T. P. Act in the context of o. 21 rule 103 of the CPC and have laid emphasis upon the provisions of s. 49 of the Indian Registration Act and S. 54 of the Transfer of Property Act which have relevance only on the question of title. . . The rigour of Sec. 49 of I. R. Act and S. 54 of the TP Act has been partially relieved by the provision of Sec. 53-A. In the case of a suit filed under rule 103 all that the plaintiff can claim is that he has a right to present possession of the property and the question of title is not relevant. In essence such a suit is defensive in character. I, therefore, prefer to follow the view taken by the Allahabad, Oudh, Madras and andhra Pradesh High Courts to the view taken by the Orissa High court on this point". (emphasis italtcs supplied) in Ranachhoddas Chahaganlal v. Deviji Supdu Dorik (18) the Supreme court observed thus:- "one of the limbs of part performance is that the transferee has in part performance of the contract taken possession of the property. The most important consideration is the contract. The true principle of the operation of the acts of part performance seems to require that the acts in question must be referred to some contract and must be referred to the alleged one; that they prove the existence of some contract, and are consistent with the contract alleged. The doctrine of part performance is defence. It is a sword and not a shield. (sic. ). It is a right to protect his possession against any challenge to it by the transferor contrary to the terms of the, contract". (underlining (italics) supplied) ( 10 ) WE are in respectful agreement with the reasoning of Chief Justice subba Rao (as he then was) in yenugu Achhaya's case (15) and of the other decisions which take that view. It is a right to protect his possession against any challenge to it by the transferor contrary to the terms of the, contract". (underlining (italics) supplied) ( 10 ) WE are in respectful agreement with the reasoning of Chief Justice subba Rao (as he then was) in yenugu Achhaya's case (15) and of the other decisions which take that view. An action for the possessory remedy of an injunction by the transferee against the transferor, in protection of the possession had in part performance of the agreement, is essentially a defensive action in which the transferee merely wields the shield of passive equity. The opposite view taken in Shankargouda's (1) case and in Muniyamma's case, (2) in our opinion, cannot be considered to have laid down the correct law. The view expressed in M. F. A. 727 77 (3) in our opinion, is the correct one. We accordingly overrule the decisions in c. R. P. No. 1012 78 (decided on 31. 7. 78 (1) and C. R. P. No. 1683 80) (decided on 28. 7. 80 ). (2) ( 11 ) COMING to the merits of the petition, both the courts below have concurrently held that the plaintiffs have established a prima facie case and also, prima facie, shown possession. On a consideration of the matter, we think that on the material on record the discretion exercised by the trial court, in granting the injunction cannot be said to be arbitrary or capricious unguided by settled principles. We cannot, in revision, reappraise the evidence and substitute a different finding in place of the finding of the courts below. However, there is one aspect of the matter which merits some consideration. As a condition attached to the grant of the injunction, the trial court has required plaintiffs to furnish security for the incomes and profits from the land for and during the pendency of the suit in the sum of rs. 5,000. However, there is one aspect of the matter which merits some consideration. As a condition attached to the grant of the injunction, the trial court has required plaintiffs to furnish security for the incomes and profits from the land for and during the pendency of the suit in the sum of rs. 5,000. The object of the interlocutory injunction, it is said "is to protect the plaintiff against injury by violation of his right for which he could not be adequately compensated by damages recoverable in the action if the uncertainly were resolved in his favour at the trial, but the plaintiff's need for such protection must be weighed against the corresponding need of the defendant to be protected against injury resulting from his having been prevented from exercising his own legal rights for which he could not be adequately compensated under the plaintiff's undertaking in damages if the uncertainity were lesolved in the defendant's favour at the trial. The court must weigh one need against another and determine where the balance of convenience' lies. ''"one of the reasons for the introduction of the practice of requiring an undertaking as to damages upon the grant of an interlocutory injunction"it is further said, "was that it aided the court in doing that which was its great object, viz. , abstaining from expressing any opinion upon the merits of the case until the hearing. see (1973) 2 W. L. R. 316. In the present case, we think that the condition for furnishment of mere security may not, as urged by Sri u. L. Narayana Rao, afford adequate protection to the interes's of the defendants, should they ultimately emerge successful at the trial. The extent of suit-land is said to be 2 acres 10 cents (wet ). Having regard to all the circumstances, we think it appropriate to direct plaintiffs, as a condition subject to which injunction is granted, 1o deposit, in the trial court, a sum of Rs. 1,500 per year towards profits and income of the lard. Order of injunction has been opeiating for two years now. For the period upto 31. 7. 81 plaintiffs shall deposit a sum of 11s. 3,000 in court on or before 31. 8. 81. Thereafter plaintiffs shall deposit a sum of rs. 1500 for each succeeding year on or before 31st July of each year. Order of injunction has been opeiating for two years now. For the period upto 31. 7. 81 plaintiffs shall deposit a sum of 11s. 3,000 in court on or before 31. 8. 81. Thereafter plaintiffs shall deposit a sum of rs. 1500 for each succeeding year on or before 31st July of each year. The deposits so made shall be invested by the trial Court in Fixed Deposits in a nationalised Bank from time to time the deposits and the interests accruing thereon shall ultimately ensure to the benefit of the party finally succeeding in the suit. Appropriate directions in this behalf shall be given by the trial court at the time of final disposal of the suit. ( 12 ) IN the result, Subject to the above modification as to terms, this revision petition is dismissed. No costs. --- *** --- .