Chandu v. Sreedharan Nair — 1997 DIGILAW 310 (KER)

Judgment :- S. Sankarasubban, J. First defendant/first respondent is the appellant. O.S. No. 112/85 was filed by respondents 1 and 2 for partition of the plaint schedule property between the plaintiffs and the first respondent after ignoring the sale deed executed in favour of the first defendant. The plaint schedule property is 4 cents in extent. It forms part of the larger extent of 10 cents. It belonged to plaintiffs 1 and 2 and defendants 2 and 3. Fourth defendant is the mother of the plaintiffs and defendants 2 and 3. By registered document dated 22.7.1974 the plaint schedule property was sold to the first respondent/ first defendant. At that time, the plaintiffs were minors. So, the document was executed by defendants 2 and 3 and the 4th defendant mother on behalf of plaintiffs 1 and 2. The consideration was Rs. 1,000/-. The case of the plaintiffs is that she mother is not the natural guardian and further, the sale deed was effected without compliance of S.8 of the Hindu Minority and Guardianship Act (hereinafter referred to as 'the act). Hence, according to law, the assignment deed is not valid and it is only binding on defendants 2 and 3. Hence, the suit was tiled for partition of their half share over the plaint schedule property. 2. First defendant filed written statement and contended as follows: The suit is not maintainable in law. Plaint tiffs have no right over the plaint schedule property. The 4 cents of property in the plaint schedule is part of a property owned by the plaintiffs and defendants 2 and 3. The plaint schedule properly was assigned for valuable consideration. It was effected for the needs and benefit of the minor plaintiffs. Fourth defendant told the first defendant that the sale consideration was to be used for the needs of the plaintiffs. First defendant bonafide believed that the sale consideration has been actually used for the benefit of the minors. The father of "the plaintiffs, who is an attester to the sale deed, has approached the defendant to purchase the property and actually look an active part in the finalisation of the transaction. It was further contended that the suit was bad for partial partition and that it was barred by limitation. The father of "the plaintiffs, who is an attester to the sale deed, has approached the defendant to purchase the property and actually look an active part in the finalisation of the transaction. It was further contended that the suit was bad for partial partition and that it was barred by limitation. Another contention taken was that in case the court finds that the property is partible the structures put by the first defendant, on the plaint schedule property should be reserved for the first defendant or he should be given value of improvements for the same. 3. The trial court framed necessary issues. It found that the mother could not legally execute the document as she was not the natural guardian when the father was alive. Further it was found that there was no sanction obtained from the District. Court as envisaged under S.8 of the Act, Thus, it was found that the assignment was invalid so far as the minor's were concerned. It also found that the suit was not barred by limitation, since it was not necessary for setting aside the document. On the question of reservation of the structures i n favour of the first defendant, the trial court held that the buildings were constructed by the first defendant believing in good faith that he has absolute title over the property and hence he is entitled to claim valuable improvements under S.51 of the Transfer of Property Act. Since the structures were constructed in good faith and under the bonafide belief that he is the full owner, the first defendant was declared to be entitled to claim reservation of all the structures constructed by him. Thus, a preliminary decree for partition was passed for dividing the plaint schedule property into four equal shares, out of which the plaintiffs were entitled to two shares and the first respondent is entitled to the remaining shares. The structures constructed by the first defendant in the property were not available for partition. They will be exclusively reserved for the first defendant. The plaint schedule property excluding the construction thereon will be subject to partition. Against the judgment and decree of the trial court reserving the structures in favour of the first defendant, the plaintiffs filed A.S. No. 66/87 before the Sub Court, Badagara. The first defendant filed cross appeal challenging the finding regarding the invalidity of the assignment deed. The plaint schedule property excluding the construction thereon will be subject to partition. Against the judgment and decree of the trial court reserving the structures in favour of the first defendant, the plaintiffs filed A.S. No. 66/87 before the Sub Court, Badagara. The first defendant filed cross appeal challenging the finding regarding the invalidity of the assignment deed. The lower appellate court upheld the findings with regard to the invalidity of the assignment deed with respect to the shares of the minors. It also found that the suit was not bad for partial partition and that it was not barred by limitation. As to the question whether the first defendant was entitled to reservation of the structures, it held that the structures were not put up by the first defendant bonafide or in good faith. Hence, it vacated the direction of the trial court reserving the structures in favour of the first, defendant. Thus, the appeal was allowed and the cost appeal was dismissed. It is against that the present appeal has been filed. 4. Learned counsel for the appellant Sri. A.P. Chandrasekharan contended that there should have been a prayer by the plaintiffs for setting aside the assignment deed and further that the suit was barred by limitation. He also contended that the entire 10 cents of property should have been included in the plaint. Further he submitted that the lower appellate court was wrong in denying the benefits of S.51 of the Transfer of Property Act to the first defendant. Sri. N.L, Krishnamoorthy appearing on behalf of the plaintiffs contended that the mother was not the natural guardian. Hence, the document executed by such a person has no legal validity. He further contended that there was no sanction from the District Court as envisaged under S.8 of the Act. Hence, according to him, Ext. B1 has no legal validity and that it can be ignored by the minors. The question of three years limitation docs not arise in this case as there was no prayer for setting aside the document. So far as the question of partial partition is concerned, he submitted that it is only in cases where the parties are co-owners with respect to the rest of the property, such a contention can be raised. Admittedly, the first defendant is no a co-owner with respect to the balance 6 cents. So far as the question of partial partition is concerned, he submitted that it is only in cases where the parties are co-owners with respect to the rest of the property, such a contention can be raised. Admittedly, the first defendant is no a co-owner with respect to the balance 6 cents. So far as the improvements effected by the first defendant is concerned, the plaintiffs admitted that such improvements were made. But the contention is that since the first defendant did not make proper enquiries at the time of purchase, he is not entitled for the value of the same. 5. Regarding the contention for setting aside Ext. B1 deed, I agree with the courts below. This is a case where the document was executed not by the natural guardian, but by the mother. It is admitted that the father was alive at the time of execution of the assignment deed. In such a case, the document has no legal effect and it can be avoided by the aggrieved person - See Chathu Chettiar v. Kanaran 1983 KLT 888. Even in cases where the document is executed by the natural guardian without compliance to the procedure under S.8 of the Act, recently a Division Bench of this Court held in Kunh Iranian v. Vanaja -1997 (2) KLT 5 - that the prayer for setting aside the document is not necessary. In view of the above decision, I don't,. think that the contention of the appellant is valid that the suit was not properly filed. 6. I agree with the courts below that the suit is not barred by limitation since three years period rule is not applicable. So far as the partial partition procedure is concerned both the courts were correct in holding that the suit is not bad for partition* The decision of this Court in Gopalan v. Vasu -1986 KLT 1100 - supports the view taken by the Court below. Hence I agree with the courts below that the suit is not bad for partial partition nor it is barred by limitation. 7. The next question to be considered is whether the appellant is entitled to the benefit of S.51 of the Transfer of Property Act. S.51 of the Transfer of Property Act is as follows: "51. Hence I agree with the courts below that the suit is not bad for partial partition nor it is barred by limitation. 7. The next question to be considered is whether the appellant is entitled to the benefit of S.51 of the Transfer of Property Act. S.51 of the Transfer of Property Act is as follows: "51. When the transferee of immovable properly makes any improvement on the property, believing in good faith that he is absolutely entitled thereto, and he is substantially evicted therefrom by any person having a better title, the transferee has a right to require the person causing the eviction either to have the value of the improvement estimated and paid or secured to the transferee, or to sell his interest in the property to the transferee at the then market-value thereof, irrespective of the value of such improvement". Thus, two conditions are to be fulfilled before the equity enacted in this Section arises; they are (1) the person evicted must be a transferee and (2) he must have made the improvements believing in good faith that he was absolutely entitled. S.51 of the Act is an application of the equitable maxim that he who seeks equity must do equity. Enquiry has been enforced in England when a person entitled in equity recovers the property from the owner of the legal estate with the assistance of the Court. The Court may then put him to equitable terms and compel him to make an. allowance for an expenditure which would not form the subject of an active claim against him. Equity in this Section was enforced by the Privy Council in KidarNath v. Madhu Mai -(1913) 40 Cal. 555, a case from the Punjab and not governed by the Transfer of Property Act, Mulla's The Transfer of Property Act, 8th Edn. Page 270 states as follows: "The scope' of the section is limited, as it applies to a transferee who in good faith believes himself to be absolutely entitled. A lessee cannot believe himself to be absolutely entitled". In the present case there is no dispute that the appellant is a transferee. 8. The next question to be considered is whether the first defendant made the improvements believing in good faith that he was absolutely entitled to the property. A lessee cannot believe himself to be absolutely entitled". In the present case there is no dispute that the appellant is a transferee. 8. The next question to be considered is whether the first defendant made the improvements believing in good faith that he was absolutely entitled to the property. 'Good faith' has been defined in the General Clauses Act, 1897 as follows: "A tiling shall be deemed to be done in "good faith' where it is in fact done honestly where it is done negligently or not". Ramanatha Iyer's Law Lexicon defines 'good faith' as follows: "Honestly, absence of fraud - collusion or deceit". S.52 of the Penal Code gives a different definition as to anything which is done without due care and attention will be held to be done in good faith. The same definition is carried in S.2(h) of the Limitation Act, S.51 of the Transfer of Property Act has come for interpretation by the various High Courts. A conspectus of these decisions show that the definition in (lie General Clauses Act has been applied. 9. In TV. Subramania Iyer v. Official. Receiver, Quilon -1958 KLT 1195 - the question that came up for consideration was the interpretation of the words 'good faith' appearing in S.35(iii) of the Travancore Insolvency Act. The said provision reads as follows: "Any transfer of property not being (i) (ii) (iii) a transfer made in favour of a purchaser or encumbrancer in good faith and for valuable consideration, shall, if the transferor is adjusted insolvent within two years after the date of the transfer be void against the receiver and may be annulled by the Court". The court was concerned as to the exact meaning to be given to the words 'goal faith'. In paragraph 10 this is what the Hon'ble-Supreme Court said: "The significance attaching to the expression'good faith' in the Travancore-Cochin General Clauses Act is in terms of the definition of that phrase in the Indian Penal Code and in the Indian Limitation Act. The Indian General Clauses Act applies to all legislation after the coming into effect of that Act. The definition of good faith' in the Indian General Clauses Act would have been applicable to the Indian Limitation Act also but the legislature in its wisdom has given a special definition of "good faith" different from the one in the Indian General Clauses Act advisedly. The definition of good faith' in the Indian General Clauses Act would have been applicable to the Indian Limitation Act also but the legislature in its wisdom has given a special definition of "good faith" different from the one in the Indian General Clauses Act advisedly. The-Indian Penal Code which came into existence earlier than the' India n General Clauses Act contains its own definition to serve its own special purposes. The Travancore-Cochin General Clauses Act, 1950, of course applies by virtue of S.2 to all enactments then in force or passed alter the commencement of the Act unless there was anything repugnant in the subject or context. Hence, it cannot be said that the definition of "good faith" as contained in the General Clauses Act of 1950 must apply in the same sense to every piece of legislation to which it may apply irrespective of the subject or the context. The Insolvency Regulation is on the same lines as the Provincial Insolvency Act and therefore must be understood in the same sense. If that is the correct approach to the law of insolvency, a secured creditor who has advanced money to a debtor honestly, even though he may not have taken all due precautions, would not come within the mischief of S.35. It must therefore, beheld that the test of good faith as laid down in the law generally applicable to Indian Statutes is more appropriate to proceedings under the insolvency law". In the case reported in Smith v. Chief Land Registrar and Ors. -1974 (1) WLR 659 - the court was considering the meaning of the words in 'good faith' in the definition of 'purchaser' under R.2(2) of the Land Registration (Official searches) Rules 1969. 'Purchaser' was defined thus: 'Purchaser' means any person (including a lessee or charge) who in good faith and for valuable consideration acquires or intends to acquire a legal estate in land". Dealing with the meaning of 'good faith the court observed as follows: "The question of good faith then is partly one of law and partly one of fact. So far as law is concerned, in my judgment, if a purchaser acts honestly he is acting in good faith' within the meaning of R.2 of-the rules of 1969, and I so hold". 10. So far as law is concerned, in my judgment, if a purchaser acts honestly he is acting in good faith' within the meaning of R.2 of-the rules of 1969, and I so hold". 10. A question came before the Madras High Court in the decision reported in Durgozi Row and Ann v. Fakeer Sahib & Ors. - ILR 30 Madras 197. In that case, the mother acting as de facto guardian of her minor son executed sale of the property belonging to the minor. The parties belonged to Muslim community. The question arose whether the parties were entitled to the benefit of S.51 of the Transfer of Property Act The Madras High Court held as follows: "The sale by the mother though made by her as de facto guardian of the minor, the parties being Muhammadans, is not binding on the minor. We cannot adopt the view of the District Judge that S.51 of the Transfer of Property Act does not apply on the ground that Chapter II of the Act is not to be deemed to affect any rule of Muhammadan Law. There is no rule of Muhammadan Law, which would preclude the defendants from claiming the benefit of the principle of equity embodied in S.51 of the Transfer of Property Act". Their Lordships then went on to say that the question whether the improvements were effected believing in good faith. It was held as follows: "The price paid for the house was therefore, adequate. There is also abundance of evidence to show that improvements have been effected in the house. The conduct of the first and second defendants appears tome to show clearly that they believed in good faith that they were absolute owners of the properly". 11. The above decision of the Madras High Court was approved in Rama Aiyar and Ors. v. Narayanasami Aiyar & Ors. - AIR 1926 Madras 609. There it was a case whether the alience from a Hindu widow is entitled to the improvements under S.51 of the Transfer of Property Act. The court held that good faith is not incompatible with ignorance of law, nor is it incompatible with a certain degree of negligence. The degree of negligence is, of course, a matter to be determined according to the circumstances of each case. The court held that good faith is not incompatible with ignorance of law, nor is it incompatible with a certain degree of negligence. The degree of negligence is, of course, a matter to be determined according to the circumstances of each case. This decision was affirmed by the Privy Council in Narayanaswami Ayyar v. Rama Ayyar - AIR 1930 PC 297. Harilal Ranchhod & Ors. v. Gordhan Keshave & Ors. - AIR 1927 Bombay 611- was a case of Hindu de facto guardian alienating the minor shares. The Bombay High Court held as follows: "The words of the section are that the transferee is to believe in good faith that he is absolutely entitled thereto. In the present case I think these conditions were satisfied and accordingly that the respondents are entitled to the benefit of that section". 12. Thus, on a perusal of the above decisions, it is clear that believing in good faith merely means honestly believed. It doesn't matter whether it is done negligently or in ignorance of law. It is in the above background, now we have to consider whether the appellant is entitled to the benefit of S.51 of the Transfer of Property Act. 13. The trial court found that the sale deed was executed for valuable consideration. The mother acted as guardian and the mother had also acted as guardian when the property was purchased. Further it found that there was no fraudulent motive or negligence on the part of the appellant. So, it held that the appellant is entitled to reservation of the structures. The appellate court held that good faith includes any act done after proper enquiry. It was of the view that no proper enquiry was not made as to whether there is necessity for the minors. Further the appellate court took the view that the ignorance of the provisions of S.8 and 11 cannot be pleaded by the appellant. Hence, it held that the appellant was not entitled to the benefit of S.51 of the Transfer of Property Act. 14. In this case, I find, in the written statement the first defendant has taken the contention that he has made improvements and that he is entitled to reservation of the same or is entitled to value of improvements thereon. Ext. B1 document shows that consideration of Rs. 14. In this case, I find, in the written statement the first defendant has taken the contention that he has made improvements and that he is entitled to reservation of the same or is entitled to value of improvements thereon. Ext. B1 document shows that consideration of Rs. 1000/- was given and it is stated in the document that this consideration was to be used purchasing back the property sold by the father and for other things. Further the first defendant was examined as DW1 and ope Narayanan Nair who 'was a mediator, was examined as DW 2. The evidence of these two witnesses would show that the father and mother of the minors approached the first defendant and that they informed him that it was for the education of the minors. It is true that the first defendant did not make any enquiry as to whether the mother can act as guardian or whether sanction from the court is necessary. The appellant was .further guided by the fact that the mother stood as guardian when the property was purchased in the name of the minors. The evidence shows that there was proper consideration for the sale. The need mentioned in Ext. B1 has not been denied by the plaintiffs or anybody on their behalf. In fact, the plaintiffs have not adduced any oral evidence. There is no suggestion that the minority was taken advantage of the third defendant to buy the property at the low price. Hence, it cannot be said that was not a honest transaction, May be the appellant was negligent in not ascertaining as to whether the mother can stand as guardian. The trend of the decision stated above shows that honest belief is not incompatible with negligence or with ignorance of law. 15. In the above view of the matter, according to me, it is case where the appellant was entitled to value of improvements. Hence, I modify the judgment and decree of the Court below as follows: 0) There will be a preliminary decree for partition of 2/4 share in the plaint schedule property in favour of the plaintiffs. (2) First defendant will be entitled to value of improvements for the structure in the property to be allotted to the plaintiffs and the first defendant can be evicted from that portion only after he is paid the value of improvements. (2) First defendant will be entitled to value of improvements for the structure in the property to be allotted to the plaintiffs and the first defendant can be evicted from that portion only after he is paid the value of improvements. (3) The value of improvements effected by the first defendant in the share allotted to the plaintiffs will be determined in the final decree proceedings. (4) The cost of the suit shall come out of estate. Second Appeal is disposed of as above.