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2006 DIGILAW 1105 (AP)

Y. RAMAMANI v. M. BIKSHAPATHI

2006-09-12

L.NARASIMHA REDDY

body2006
( 1 ) THESE three second appeals are between the same parties and in respect of the same subject- matter. Hence, they are disposed of through a common judgment. For the sake of convenience, the parties are referred to, as arrayed in Second Appeal No. 248 of 1994. ( 2 ) SMT. Pullamma, the mother of the respondent was the absolute owner of house bearing No. 1-7-5 78/4, admeasuring about 246 sq. yards situated at Ramnagar, Hyderabad. That was purchased by the appellant for consideration of Rs. 5,000/- through a sale deed dated 14-6-1974. On the same day, the appellant executed an agreement, to reconvey the suit schedule property, on condition that the sale consideration is repaid within three years. A rental deed was executed by the appellant in favour of the husband of Pullamma, by name Chittari, and their son, tne respondent, stipulating the rent of Rs. 113/- per month. Pullamma and chittari died. The respondent is their sole legal representative. ( 3 ) THE appellant filed O. S. No. 2916 of 1980 against the respondent and his father, for eviction. She pleaded that the respondent and his father are her tenants, and they committed default in payment of rent from February 1977 onwards. A notice dated 23-7-1980, under Section 106 of the transfer of Property Act (for short 'the act') was issued. The relief of recovery of a sum of Rs. 4,068/- towards arrears of rent, for the period from 14-8-1977 to 14-8-1980 was also claimed. ( 4 ) THE respondent and his father filed written-statement, opposing the suit. It was alleged that the sale in favour of the appellant, was more in the form of a security. They pleaded that the property was worth lakhs, as on the date of the sale deed, and the fact that it was sold only for a sum of Rs. 5,000/-, discloses that it was almost in the form of a mortgage, by conditional sale. It was alleged that the period specified in the agreement, dated 14-6-1974 was extended, through a separate deed dated 3-12-1977, enhancing the rent, to Rs. 150/- per month. They expressed the readiness and willingness to perform their part of the contract. They complained that the appellant avoided reconveyance, even after they offered to pay the agreed consideration. It was alleged that the period specified in the agreement, dated 14-6-1974 was extended, through a separate deed dated 3-12-1977, enhancing the rent, to Rs. 150/- per month. They expressed the readiness and willingness to perform their part of the contract. They complained that the appellant avoided reconveyance, even after they offered to pay the agreed consideration. ( 5 ) PULLAMMA filed O. S. No. 176 of 1982 in the Court of VII Assistant Judge, city Civil Court, Hyderabad, for specific performance of the agreement of sale dated 14-6-1974, as extended by document dated 3-12-1977. The contents of the plaint, in this suit, were almost the same as those, in the written-statement filed in O. S. No. 2916 of 1980. Pullamma died during the pendency of the suit. Hence, the respondent herein was brought on record, as legal representative. ( 6 ) THE appellant filed her written- statement, opposing O. S. No. 176 of 1982. She admitted the execution of agreement dated 14-6-1974, but denied the allegation that a deed of extension was executed on 3-12-1977. She pleaded that time was the essence of the contract under the agreement, and since respondents failed to discharge their part of the obligation within the stipulated time, the agreement stood cancelled, and become unenforceable in law. ( 7 ) THE trial Court clubbed the suits and common evidence was recorded in o. S. No. 2916 of 1980. Through separate judgments, dated 8-10-1987, the trial court dismissed O. S. No. 2916 of 1980 and decreed O. S. No. 176 of 1982. Appellant filed A. S. Nos. 68 and 104 of 1988 in the court of Additional Chief Judge (Temporary), city Civil Court, Hyderabad, against the decrees referred to above. The Appellate court partly allowed A. S. No. 68 of 1988, affirming the dismissal of the suit for eviction, but decreeing the suit for recovery of the arrears of rent. While the appellant filed second Appeal No. 322 of 1994, aggrieved by the denial of relief of eviction, the respondent filed S. A. No. 279 of 1994, canvassing the correctness of the decree for recovery of rents. A. S. No. 104 of 1988 was dismissed through a separate judgment dated 7-2-1994. Second Appeal No. 248 of 1994 is filed by the appellant, against it. A. S. No. 104 of 1988 was dismissed through a separate judgment dated 7-2-1994. Second Appeal No. 248 of 1994 is filed by the appellant, against it. ( 8 ) SRI Eranki Phani Kumar, learned counsel for the appellant submits that the transaction of lease of the property, in favour of the respondent and his father was separate and independent of the agreement of sale, in favour of Pullamma, and that there was no justification for the courts below in mixing up these two separate transactions. He contends that the agreement of sale stipulated specific time, and contained a clause, suggesting that the time is the essence of contract and for reasons best known to them, the respondent or his mother did not file the said agreement before the Courts below. Learned Counsel points out that his client never executed any deed of extension. ( 9 ) SRI Phani Kumar, further contends that though the respondent and his parents expressed their willingness to perform their part of the contract, his client was justified in not acting upon it, since it was not expressed, at a point of time, when it was required to be done. Another facet of the argument of the learned Counsel is that, when an agreement of sale is executed for reconveying the property, which was purchased on the same day, the clauses contained therein need to be interpreted strictly and even the slightest of the deviations from it, must entail, in denial of the special benefit conferred under such contracts. He places reliance upon several judgments, in support of his contention. ( 10 ) SRI B. Dayakar Reddy, learned counsel for the respondent submits that the sale in favour of the appellant was preceded by a similar transaction in favour of her father-in-law, which was undoubtedly a measure of security, and that the sale deed dated 14-6-1974 came to be executed at the instance of the appellant, as a security for repayment. Learned Counsel points out that the very fact that the possession of the property continued with the respondent and his parents, and that the rent was agreed to be adjusted towards interest, would disclose the nature of transaction. According to him, the appellant executed a deed of extension on 3-12-1977 and it was proved to the satisfaction of the Courts below. According to him, the appellant executed a deed of extension on 3-12-1977 and it was proved to the satisfaction of the Courts below. ( 11 ) THE facts that led to the filing of these three second appeals have already been stated within the permissible limits of brevity. The sale of the schedule property in favour of the appellant was not denied. Some controversy persisted, as to whether the said transaction needs to be treated as an outright sale with an obligation to reconvey the property, or a mortgage by conditional sale. It is also a matter of record that the appellant leased the property, to the husband and son of the person from whom she purchased it. The appellant did not dispute that she executed an agreement of sale dated 14-6-1974, in favour of pullamma from whom, she purchased it, on the same day. ( 12 ) THE appellant tiled the suit, O. S. No. 2916 of 1980, for recovery of possession by evicting the tenants. Pullamma, on the other hand, filed O. S. No. 176 of 1982 for specific performance of the agreement of sale. Necessary issues were framed in both the suits. The evidence was referred to, in the judgment in O. S. No. 2916 of 1980 alone. However, a perusal of the separate judgments rendered in the two suits disclosed that separate documentary evidence existed, in relation to the other suit also. ( 13 ) IN view of the submissions made by the learned Counsel for the parties, the following questions arise for consideration: (a) Whether the right to re-purchase the suit schedule property is forfeited, on account of the expiry of the time for payment of the consideration? (b) Whether the appellant is entitled to recover possession of the suit schedule property? before undertaking discussion on the two questions, referred to above, certain principles enunciated by various Courts, touching on them need to be adverted to. ( 14 ) WHILE the appellant pleaded that she became absolute owner of the property, through the sale deed, marked as Ex. A. l in O. S. No. 2916 of 1980, the respondent and his parents, pleaded that the whole transaction was in the form of a security, for repayment of the loan. The trial Court held that the transaction was more in the nature of a security for repayment of the debt. A. l in O. S. No. 2916 of 1980, the respondent and his parents, pleaded that the whole transaction was in the form of a security, for repayment of the loan. The trial Court held that the transaction was more in the nature of a security for repayment of the debt. It took into account the facts that the value of the property at the relevant point of time was Rs. 50,000/-, whereas the consideration for sale was only Rs. 5,000/ -. It was also noticed that prior to the sale in favour of the appellant, the mother of the respondent borrowed amount from the father-in-law of the appellant and the very fact that the said individual figured as a witness, would buttress the contention of the respondent. The Lower Appellate Court on the other hand, treated the transaction as a sale- simplicitor. It was impressed by the fact that after the purchase, the property was leased to persons, other than the vendor of the appellant and that the possession was not retained to the said vendor. ( 15 ) IN N. Pattay Gounder v. P. L. Bapuswami, AIR 1961 Mad. 276 , it was held that the Court has to make an endeavour to ascertain the real intention of the parties to the document, in such cases. Placing reliance upon the judgment of the Supreme court in Bhaskar Waman Joshi v. Shrinarayan Rambilas Agarwar, AIR 1960 sc 301 , it was observed that the true intention of the parties to the transaction has to be gathered from the language employed in the deed, the surrounding circumstances. In Chunchun Jha v. Ebadat all, AIR 1954 SC 345 , Bose, J. , held that the subject is the one, which is dictated more by reasons, and one has to endeavour to ascertain whether there existed the relationship of debtor and creditor, between the parties. The difficulty in the matter, notwithstanding the amendment of Section 58 (c) of the Transfer of Property Act, was aptly explained by the Supreme Court. ( 16 ) IN Shanmugam Pillai v. Annalakshmi, AIR (37) 1950 Federal Court 38, the facts were almost identical to the present case, except that, the property sold by the purchaser in that case was leased to the vendee himself. While in the instant case, the lease was in favour of the husband and son of the vendor. ( 16 ) IN Shanmugam Pillai v. Annalakshmi, AIR (37) 1950 Federal Court 38, the facts were almost identical to the present case, except that, the property sold by the purchaser in that case was leased to the vendee himself. While in the instant case, the lease was in favour of the husband and son of the vendor. Patanjali Sastri, J. , held that the conditions of the agreement of sale, in such cases must be construed very strictly, and such agreements were treated as those, conferring privilege and concession, than indulging in penalty. Non-compliance with any condition was held to result, in forfeiture. Several other cited judgments by the learned counsel for the appellant had reiterated the same principle. ( 17 ) THIS Court is of the view that in the facts of the present case, it is not necessary to undertake an exercise, to ascertain whether a transaction between the appellant and her vendor was the one of a mortgage in the form of conditional sale or sale with a condition to reconvey the property. The reason is that Pullamma had recognized the title of the appellant herein in the suit property and filed the suit for specific performance of agreement of sale, which undisputedly was executed by the appellant. An important feature is that, on the face of it, the consideration is totally disproportionate to the value of the property. Further, the agreement of sale came to be executed on the same date, on which the property was purchased by the appellant. The property continued to be under the effective possession of Pullamma, inasmuch as it was leased by the appellant to the husband and son of the said pullamma. These aspects would certainly persuade the Court to differentiate the entire dispute, from the one, in case between two strangers, and where the agreement of sale is not preceded by any transaction between them. ( 18 ) COMING to the first question, it is not in dispute that the appellant executed an agreement of sale in favour of Pullamma and the consideration was agreed to be rs. 5,000/ -. The consideration was to be paid within three years. The only ground on which the appellant refused to perform her obligation under the said agreement of sale is that, Pullamma did not pay the consideration within the agreed period of three years. 5,000/ -. The consideration was to be paid within three years. The only ground on which the appellant refused to perform her obligation under the said agreement of sale is that, Pullamma did not pay the consideration within the agreed period of three years. If the period stipulated under the agreement remained intact, there was no way, the specific performance could have been ordered. However, it was contended that the period was extended by another four years, duly enhancing the rent from rs. 133/- to Rs. 150/- per month, and a separate deed, marked as Ex. A. l, was executed on 3-12-1977. The appellant denied the execution of the sale. ( 19 ) ON her part, Pullamma examined the witnesses to the document and explained the circumstances under which it was executed. No effort was made to discredit this evidence. The appellant did not enter witness box, to put forward her version, about Ex. A. 1 in O. S. No. 176 of 1982. There was no evidence to the contrary. The only plea raised by the appellant stood rejected, with the proof of Ex. A. l. The right of pullamma to enforce the agreement of sale against the appellant stood intact, and it cannot be said that her right to seek performance stood forfeited. Therefore, the trial Court was left with no alternative, except to decree the suit for specific performance. ( 20 ) THE second question is, in a way, related to the first one. If the appellant is under obligation to execute a sale deed in favour of the respondent (representative of his mother, Pullamma), the question of evicting him as lessee of that property; does not arise. A perusal of the plaint in O. S. No. 2916 of 1980 discloses that the appellant pleaded as though the respondent and his father are just tenants, and nothing more. No reference was made to the circumstances that gave rise to the lease of the property or the rent being paid as interest for the amount borrowed by Pullamma. That however, is a different aspect. Once it has emerged that the appellant is under obligation to sell the property on receiving consideration of Rs. 5,000/-, her prayer to evict the respondent herein cannot be acceded to. Therefore, this question is also answered against the appellant. ( 21 ) FOR the foregoing reasons, Second appeal Nos. That however, is a different aspect. Once it has emerged that the appellant is under obligation to sell the property on receiving consideration of Rs. 5,000/-, her prayer to evict the respondent herein cannot be acceded to. Therefore, this question is also answered against the appellant. ( 21 ) FOR the foregoing reasons, Second appeal Nos. 248 and 322 of 1994 are dismissed ( 22 ) SECOND Appeal No. 279 of 1994 is filed by the respondent in S. A. No. 248 of 1994. This is directed against the decree passed by the Lower Appellate Court, for recovery of arrears of rent. A perusal of the pleadings and evidence on record discloses that the tenant did not pay the rent for quite sometime. This contention was repelled by pleading that, for some period the rent was paid, but no receipts were given, and for the other period, the rent was not received at all. Be that as it may, the lower Appellate Court had undertaken extensive discussion on this aspect and held that the arrears of rent, had accrued and that the same must be paid. This Court does not find any basis to interfere with the said finding and the resultant decree. The second Appeal No. 279 of 1994 is also dismissed accordingly. ( 23 ) THERE shall be no order as to costs. .