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2017 DIGILAW 307 (KER)

NAILAABDUL NAZAR v. GOPALAKRISHNAN

2017-02-14

SATHISH NINAN, V.CHITAMBARESH

body2017
JUDGMENT : Chitambaresh, J. The court below has again decreed the suit for specific performance pursuant to the order of remand in A.S. No. 24/2000 by this court and the first defendant has come up in appeal. A quarter century has elapsed since the execution of the agreement for sale and the matter has to be given a quietus one way or the other. We heard Mr. T.O. Xavier, Advocate on behalf of the appellant and Mr. V.V. Asokan, Senior Advocate and Mr. K.C. Eldho, Advocate on behalf of the respondents. 2. The subject matter of the suit is a shop room bearing Door No.38/941 with rights over the common staircase, water tank etc. in the ground floor of a three storied building. The building houses many shop rooms on a land purchased in the name of defendants 1 to 3 (under sale deed No.3039/1982) by their maternal grandfather. It appears that their father constructed the building with an intention that each floor should go to defendants 1 to 3 separately. Ext.A4 agreement was later executed with a 'declaration' that the ground, first and second floor would belong to defendants 1, 2 and 3 respectively. The third defendant being a minor was represented by her father as the guardian in Ext.A4 agreement executed after the construction of the building. 3. The first defendant subsequently entered into Ext.A1 agreement for sale in respect of Shop room No.38/941 with the plaintiff for a consideration of Rs. 5,50,000/-. It is explicitly stated in Ext.A1 agreement that the first defendant derived title to the shop room under Ext.A4 agreement for partition. Ext.A1 agreement for sale has sanctity only if the first defendant derived title to the shop room under Ext.A4 agreement for partition which is unregistered. The land was purchased jointly in the names of defendants 1 to 3 who however had no pre-existing title over the building constructed by their father. 4. Ext.A4 agreement for partition is not a memorandum recording past partition as a family settlement in the light of the 'declaration' therein as regards division. Ext.A1 agreement on the other hand is emphatic that the first defendant derived title to the shop room and the appurtenant land under Ext.A4 agreement only. 4. Ext.A4 agreement for partition is not a memorandum recording past partition as a family settlement in the light of the 'declaration' therein as regards division. Ext.A1 agreement on the other hand is emphatic that the first defendant derived title to the shop room and the appurtenant land under Ext.A4 agreement only. Ext.A4 agreement is hit by Section 17(2) of the Registration Act, 1908 in the light of the decision in Kale v Deputy Director of Consolidation [ (1976) 3 SCC 119 ]. It is held therein as follows:- "(4) It is well settled that registration would be necessary only if the terms of the family arrangement are reduced into writing. Here also, a distinction should be made between a document containing the terms and recitals of a family arrangement made under the document and a mere memorandum-prepared after the family arrangement had already been made either for the purpose of the record or for information of the court for making necessary mutation. In such a case the memorandum itself does not create or extinguish any rights in immovable properties and therefore does not fall within the mischief of Section 17(2) of the Registration Act and is, therefore, not compulsorily registrable;" To the same effect is the dictum in Tek Behadur Bhujil v. Debi Singh Bhujil [ AIR 1966 SC 292 ] which decisions have been followed in Sosamma Oomman v. Annamma Simon [2016 (4) KLT 122 (DB)]. 5. The first defendant in the additional written statement and defendants 2 and 3 in their written statement have disputed the legality of Ext.A4 agreement as a partition deed. Firstly, Ext.A4 agreement for partition was executed at a time when the third defendant was a minor and represented by her father. Secondly, defendants 1 to 3 had no pre-existing right over the building in their property which was admittedly constructed by their father when he was alive. Thirdly, Ext.A4 agreement is not a memorandum recording past partition which is therefore hit by Section 17(2) of the Registration Act, 1908. Fourthly, it cannot be stated with precision that shop room No.38/941 belonged to the first defendant alone on the date of Ext.A1 agreement. Fifthly, it is not the share of the first defendant over the whole of the property agreed to be sold that could be saved by Section 12(3) of the Specific Relief Act, 1963. Fourthly, it cannot be stated with precision that shop room No.38/941 belonged to the first defendant alone on the date of Ext.A1 agreement. Fifthly, it is not the share of the first defendant over the whole of the property agreed to be sold that could be saved by Section 12(3) of the Specific Relief Act, 1963. A reference in this context to the decisions in Krishnan v. Krishnan [ 1993 (1) KLT 384 ] as affirmed in Krishnan v. Krishnan ( 2003 (3) KLT 166 (DB)] would be apposite. We are not for a moment disturbing the 'understanding' amongst defendants 1 to 3 as regards the enjoyment of the three storied building. This is particularly so since the first defendant in her evidence has deposed that she has no right in the first and second floor of the building. 6. The decision in M.K. Marattukulam Vs. Hemchand [ 1988 (2) KLT 166 ] (DB) followed in Alikutty Palathingal Vs. Infant Jesus Church [ 2005 (4) KLT 296 ] (DB) is to be distinguished. It is held therein as follows: "Whether the vendors had full title to the property agreed to be conveyed to the plaintiff is not a question properly arising for decision in the present suit for specific performance. If their title is defeasible at the instance of persons not parties to the suit, the purchaser will get only such title as the vendors themselves had in the property. It is not open to the vendors to set up title of third parties in defence to the suit for specific performance." (emphasis supplied) The above was a case where the sons of a Christian father contended that their sisters too had right in view of Mary Roy's case who had not joined in the agreement for sale. It was therefore held that specific performance cannot be refused merely because the title which the purchaser may acquire might be defeasible by a third party. The title over the land vests in defendants 1 to 3 jointly and the title over the building vests in their father in the instant case. It cannot be inferred with certainity that shop room No. 38/941 belonged to the first defendant on the date of Ext.A1 agreement or would fall to her share. The title over the land vests in defendants 1 to 3 jointly and the title over the building vests in their father in the instant case. It cannot be inferred with certainity that shop room No. 38/941 belonged to the first defendant on the date of Ext.A1 agreement or would fall to her share. It can at best be stated that the first defendant is also entitled to one third share over the whole property including the shop room. Suffice it to say that it is not prudent to specifically enforce Ext.A1 agreement for sale in respect of the entire shop room in such nebulous state of affairs. 7. It is in evidence that the first defendant had created an equitable mortgage of shop room No.38/941 in favour of the fourth defendant by deposit of title deeds on 6.5.1992. Ext.A1 agreement obliges the first defendant to discharge the mortgage debt and convey the property free of liability to the plaintiff. The court below was at liberty to call in aid Section 13(1)(c) of the Specific Relief Act, 1963 if specific performance of the contract was justifiable. The statutory provision runs thus:- 13. Rights of purchaser or lessee against person with no title or imperfect title- (1) Where a person contracts to sell or let certain immovable property having no title or only an imperfect title, the purchaser or lessee (subject to the other provisions of this Chapter), has the following rights, namely:- x x x x x x x x x x x x (c) where the vendor professes to sell unencumbered property, but the property is mortgaged for an amount not exceeding the purchase money and the vendor has in fact only a right to redeem it, the purchaser may compel him to redeem the mortgage and to obtain a valid discharge, and, where necessary, also a conveyance from the mortgagee." The court can thus direct the mortgagor to redeem the mortgage and obtain a valid discharge from the mortgagee if the following conditions prescribed by the statute are satisfied: (i) The vendor should have professed to sell the property unencumbered; (ii) The property is mortgaged for an amount not exceeding the purchase money; (iii) The vendor has only a right to redeem the property. The court can even direct a conveyance to be got executed from the mortgagee in proof of the redemption as per Section 13(1)(c) of the Specific Relief Act, 1963. The court below has instead determined the liability of the first defendant to the fourth defendant at Rs. 2,50,000/- with interest thereon at 10%. The court below in so doing deducted the amount liable to be paid by the fourth defendant to the first defendant as the rent for shop room No.38/941. (It appears that the fourth defendant is occupying shop room No.38/941 as a tenant and that its managing partner is the brother of the plaintiff). The court below has strayed from the permitted trajectory in adjudging the liability towards rent for giving credit towards the mortgage liability. It is stated at the bar that the plaintiff has deposited the balance sale consideration after the adjustments towards mortgage debt and rent. 8. The execution of Ext.A1 agreement for sale as well as the receipt of Rs. 1,00,000/- as advance by the first defendant from the plaintiff is well conceded. It would be in the fitness of things if a decree for return of the amount paid as advance is granted in exercise of the discretion under Section 20 of the Specific Relief Act, 1963. The plaintiff is accordingly granted a decree for Rs. 1,00,000/- with interest thereon at 9% per annum from the date of plaint (28.8.1995) against the first defendant and her assets. The decree of the court below is accordingly modified leaving open the rights of the parties as regards the liability under the mortgage or towards rent. The Appeal Suit is allowed in part. No costs. I am in respectful agreement with the conclusions arrived at by my learned brother. A shop room on the ground floor of a three storied building is the subject matter of Ext.A1 agreement for sale executed by the 1st defendant in favour of the plaintiff. Title over the said room is claimed by the 1st defendant under Ext.A4 partition agreement executed between defendants 1 to 3. Ext.A1 narrates that Ext.A4 partition agreement was executed since it was felt that severance of co-ownership right is to be effected in the interests of the sharers. Ext.A4 is an unregistered document. Title over the said room is claimed by the 1st defendant under Ext.A4 partition agreement executed between defendants 1 to 3. Ext.A1 narrates that Ext.A4 partition agreement was executed since it was felt that severance of co-ownership right is to be effected in the interests of the sharers. Ext.A4 is an unregistered document. Going to Ext.A4, there is severance of co-ownership rights and declaration of specific portions of the building to each of the sharers under the document. It admits of no doubt that it is a compulsorily registrable document in terms of Section 17(1)(b) of the Registration Act, 1908 and it being unregistered, cannot affect immovable property. By virtue of Section 49(a) of the Registration Act, 1908, the unregistered document shall not affect the immovable property dealt with therein and further Section 49(c) prohibits receiving of that document as evidence of any transaction affecting such property. Therefore, Ext.A4 partition agreement could not be relied upon to confer title over the shop room in question to the 1st defendant. In an earlier round, this Court had as per judgment dated 06.06.2000 remanded the matter to trial court for fresh disposal. Certain observations made by this Court in the remand order are of significance which are as under: "...The other question that arose was whether the defendant had absolute right over the property agreed to be sold and what is the nature of the decree that has to be passed by the court, whether a decree for conveyance of entire rights over the property or share of the first defendant over the same in case it was found that no valid partition had been effected." "...whether this is a case to which Section 12 is attracted in case it is found that there has been no concluded partition or valid partition between defendants 1 to 3 are questions that required to be considered in their proper perspective by the court which is called upon to grant a decree for specific performance." Therefore, in the earlier round itself this Court was of the opinion that the validity of the title claimed by the 1st defendant over the shop room in question under Ext.A4 partition agreement needs to be considered. Pursuant to the remand, the trial court upheld the validity of Ext.A4 finding it to be a family arrangement. Pursuant to the remand, the trial court upheld the validity of Ext.A4 finding it to be a family arrangement. The fact that severance of co-ownership rights and declaration of rights over the immovable property were effected under Ext.A4 unregistered deed, was not taken note of by the court below. I fully endorse the view of my learned brother that Ext.A4 unregistered document could not be relied upon to confer title over the shop room in question to the 1st defendant. Once Ext.A4 partition agreement is eschewed from consideration, the result would be that defendants 1 to 3 are co-owners in respect of the shop room in question. We are not oblivious of the fact that there could even be an oral partition in between the co-owners. Though oral arrangements between defendants 1 to 3 have been pleaded by the plaintiff, the same has been denied by the defendants in the written statement. There is no case for the plaintiff that dehors Ext.A4 partition agreement 1st defendant has exclusive title over the shop room in question by virtue of any oral partition. There is also no such issue or consideration in the suit. Therefore, defendants 1 to 3 could only be considered as co-owners in respect of the shop room. However, it is made clear that this finding would not stand in the way of defendants 1 to 3 from proving between them an oral partition. Then the question that arises for consideration is, as to whether a decree for specific performance could be granted in favour of the plaintiff for the 1/3rd undivided share of the 1st defendant in the shop room in question under Section 12(3) of the Specific Relief Act. Taking it to be that the 1/3rd right of the 1st defendant over the shop room in question could be directed to be conveyed to the plaintiff under Section 12 of the Specific Relief Act, still it does not mean that court is bound to grant such a decree. The relief of specific performance has its roots in equity. The power to grant a decree for specific performance is discretionary under Section 20 of the Specific Relief Act. It is to be noticed that even independent of Section 20, the grant of a decree for specific performance of part of a contract is, on the terms of Section 12 of the Specific Relief Act, discretionary. The power to grant a decree for specific performance is discretionary under Section 20 of the Specific Relief Act. It is to be noticed that even independent of Section 20, the grant of a decree for specific performance of part of a contract is, on the terms of Section 12 of the Specific Relief Act, discretionary. The Apex Court in HPA International v. Bhagwandas Fateh Chand Daswani and Others ([2004] 6 SCC 537) at paragraph 72 held thus: "72. The power to grant partial relief, from the very language of Section 12(3) is discretionary with the court to be exercised keeping in view the facts and circumstances of each case and the rights and interests of the parties involved." Therefore, the grant of a decree for specific performance in respect of the 1/3rd share of the 1st defendant over the shop room in question, is a matter which falls within the realm of discretionary power of the court. This Court being conscious of the fact that the subject matter of the agreement is only one room and that what could at best be directed to be conveyed is only the 1/3rd right over that room, foreseeing the lack of feasibility and the difficulties in the right of enjoyment, it is deemed appropriate that the discretion be exercised against the grant of a decree for specific performance. The decree for specific performance, is accordingly, set aside. Necessarily, as held by my learned brother, the plaintiff is entitled to get refund of the advance amount paid, with interest. As regards the direction in the impugned judgment regarding the mortgage, since the relief of specific performance is being denied, deliberations on the nature of the decree to be passed under Section 13(c) is not entered into.