Deochand v. Birikhdas — 1996 DIGILAW 767 (MP)

JUDGMENT R.S. Garg, J. 1. The plaintiff Birikhdas filed a suit basically against the appellant/defendants Nos. 1 to 3, inter alia pleading that on 14.9.1957, the plaintiff has purchased the property from defendants Nos. 4 and 5 and since then the plaintiff was in possession. Some where near Diwali in the year 1978, defendants Nos. 1 to 3 tried to interfere with the possession of the plaintiff, therefore, an injunction he granted in his favour or if it is found that the plaintiff was not in possession, possession be delivered to him. Defendants Nos 1 to 3 come with the case that the properly belonged to one Pargan, who was husband of defendants No. 4, and 5. One Jaspal Singh had purchased the property from Pargan on 23.5.1955, therefore, on 14.9.1957, defendants Nos. 4 and 5 had no right, title or interest in the property. It was further pleaded that Jaspal Singh reconvened the property in favour of defendants Nos. 4 and 5 on 27.5.1964 and therefore defendants Nos. 4 and 5 sold the property on 23.1.1974 under Ex. D-2 to the defendants. According to them, they were in possession of the property. The learned trial Court after recording evidence and hearing the parties held that on 14.9.1957, defendants Nos. 4 and 5 had no right, title or interest in the property, therefore, the sale dead executed by them, would not convey any title to the plaintiff and as he was not in possession, he would not be entitled to a decree. During the pendency of the suit, the plaintiff died, therefore, his legal representatives were brought on record. The legal representatives took up the matter in appeal. The first appellate Court, applying the principles underlying section 43 of the transfer of property Act, allowed the appeal holding that if defendants Nos. 4 and 5 had no transferable rights on 14.9.1957 but as they had acquired rights on reconveyance on 27.5.1964, the plaintiff would be entitled to a decree in his favour. The learned first appellate Court was also of the view that subsequent conferral of title on defendants Nos. 4 and 5 was good enough to convey title in favour of the plaintiff. The first appellate Court also opined that the defendants have not perfected their title by adverse possession. Being aggrieved by the judgment and decree passed by the first appellate Court, defendants Nos. 4 and 5 was good enough to convey title in favour of the plaintiff. The first appellate Court also opined that the defendants have not perfected their title by adverse possession. Being aggrieved by the judgment and decree passed by the first appellate Court, defendants Nos. 1 to 3 have preferred this appeal. Shri Pandey appeared for the appellants but the respondents had chosen to remain ex parte. The appeal was admitted for hearing on 2.4.1987 on the following substantial question of law. Whether the lower appellate court committed error of law in reversing the judgment and decree passed by the trial Court because, according to the appellant/defendant, section 43 of the Transfer of Property Act has no application ? 2. According to Shri Pandey, the plaintiff had never come with the case that he was exercising his option under section 43 of the Transfer of Property Act, therefore, he would acquire rights in the property. He further submits that the provisions of section 43 would not be applicable to a bona fide purchaser not it shall impare the rights of the transferees in good faith for consideration without notice of the existence of the option which the first transferee was entitled to exercise. According to him, the requirements of section 43 must be pleaded, the other party should be given a chance, and the plaintiff should come with the case and must unequivocally plead that he had exercised that option and as such the original owner was bound by the transfer which was affected by him when he had no right to effect and the subsequent purchaser from the transfer or would not acquire any rights. 3. In the matter of Kewaldas Vs. Rambharose, (1) a Division Bench of this Court has held that a person who wishes to take advantage of section 43 of the T.P. Act must show that there was an erroneous or fraudulent representation on the part of the transferor that he was authorised to transfer the property and further that he first purchaser acted on the representation. Tire question whether there was such representation and whether there was acting (action) on such representation are questions of fact. Tire question whether there was such representation and whether there was acting (action) on such representation are questions of fact. These questions have to be alleged specifically and proved by the person invoking the benefit of section 43 of the Act Section 43 is a specie of estoppel and cannot, therefore, be availed of by a person who knowing the facts was not misled; question of knowledge and belief are material and that the other side must, therefore, be given a chance of raising these defences if and when section 43 is pleaded. 4. The plaint is absolutely silent about section 43 and its application. The plaint now where states that defendants Nos. 4 and 5 ever made a representation, fraudulently or erroneously, before the plaintiff that they were authorised to transfer the immovable property in favour of the plaintiff. The plaintiff had come with the case that he had purchased the property in the year 1957 and was put in possession. The defendant came with the case that the husband of defendant No. 4, and defendant No. 5 had already transferred the property in favour of Jaspal Singh who reconvened the property in favour of defendants Nos. 4 and 5, in the year 1964. If the plaintiff wanted to take advantage of this subsequent event which might or might not have been within his knowledge, he was required to plead the facts. It cannot be lost sight of that when the plaintiff proposes to take shelter under the provisions of section 43 of the Act, he has to plead that he has exercised the option and because of the option he has become the absolute owner of such property which was transferred to him by the person who subsequent to the transfer acquired the rights. Not only this, section 43 protects the rights of the bona-fide purchaser. The proviso would certainly govern the main section because a purchaser for consideration who purchased the property in good faith and had no notice of the existence of the option would otherwise be defenseless. On one hand, section 43 is based on pleading of estoppel, then at the same time it requires the first transferee to exercise his option and at least expects of him that he would plead the material facts that he had exercised the option and the manner in which the option was exercised. On one hand, section 43 is based on pleading of estoppel, then at the same time it requires the first transferee to exercise his option and at least expects of him that he would plead the material facts that he had exercised the option and the manner in which the option was exercised. Section 43 of the T.P. Act protects a transferees in good faith without notice of the option. It protects the rights because untill the option is exercised, the tranferee's right to acquire property is only contractual obligations and the transferor holds the interest as his trustee. In the absence of proper pleadings and proof this aspect of the matter could not have been considered by the first appellate Court. The first appellate Court in my opinion was not justified in granting a decree in favour of the plaintiff after applying the principles of section 43 of the T.P. Act. 5. In the matter of Jumma Masjid Vs. Kodimaniandra Devish, A.I.R. 1962 S.C. 847 the Supreme Court has observed as under : Section 43 embodies a rule a estoppel and anacts that a person who makes a representation shall not be heard to allege the contrary as against a person who acts on that representation. It is immaterial whether the transferor acts bona-fide or fraudulently; in making the representation. It is only material to find out whether in fact the transferee has been misled. For the purpose of the section it matters not whether the transferor acted fraudulently or innocently in making the representation, and that what is material is that he did make a representation and the transferee had acted on it. Where the transferee knows as a fact that the transferor does not possess the title which he represents he has, then he cannot be said to have acted on it when taking a transfer. Section 43 would then have no application and the transfer will fail under section 6 (a). But where the transferee does act on the representation, there is no reason why he should not have the benefit of the equitable doctrine embodies in S.43, however fraudulent the act of the transferor might have been. 6. Section 43 would then have no application and the transfer will fail under section 6 (a). But where the transferee does act on the representation, there is no reason why he should not have the benefit of the equitable doctrine embodies in S.43, however fraudulent the act of the transferor might have been. 6. According to the Supreme Court, where the transferee knows as fact that the tranferor does not possess the tide which he represents he has, then, he cannot be said to have acted on it when taking a transfer. The first appellate Court without appreciating the legal position has decreed the plaintiffs suit. The judgment and decree deserve to be set aside. Those are accordingly set aside. 7. The matter is remanded back to the first appellate Court for hearing the matter in accordance with law. The first appellate Court shall hear and decide the matter afresh on the facts which are before the Court. If the parties propose to amend the pleadings, the first appellate Court may in its discretion and it is necessary may permit the parties to amend the pleadings. The appellant shall appear before the first appellate Court on 16.10.1996. The Registry is directed to remit the record immediately so as to reach the first appellate Court before the date of appearance. The first appellate Court shall issue fresh notice to the plaintiffs, as in their capacity as respondents they are not represented before this Court. It is made clear that the first appellate Court shall not proceed with the hearing unless the plaintiffs (appellants before it) are served. With the observations and directions above, the appeal is allowed. Parties to bear their own costs. A decree be framed accordingly.