Arumaraj Devadhas vs K. Sundaram Nadar (D) By Lrs. & Ors

Arumaraj Devadhas ... Appellant

Vs.

K.Sundaram Nadar (D) by LRs. & Ors. ... Respondents

ORDER

This appeal by special leave is filed by the third defendant in a

suit for declaration of title and possession, and consequential

permanent injunction (OS No.110/1979 on the file of Additional

District Munsiff, Kuzhithurai) filed by the first respondent herein (of

whom respondents 2 to 11 herein are the LRs.). Defendants 1,2,4 and

5 in the said suit are respectively respondent Nos.12,13,14 and 15

herein. Respondents 3,12,13 and 15 have been subsequently deleted

by the appellant at his own risk. For convenience, we will refer to the

parties by their ranks in the suit.

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2. The first defendant (Karunakaran Nadar) sold the suit property

(an extent of 14 cents in Survey No.1817 from out of several

properties allotted to him at a family partition) to the second

defendant (Solomon Nadar) under a registered Sale Deed dated

1.8.1946. The second defendant executed a Deed of Possessory

Mortgage dated 16.1.1947 in favour of one Syeed Kannu. Plaintiff

alleged that the said mortgage was not redeemed and Syeed Kannu

became the absolute owner thereof, and on his death the suit land was

inherited by his son Mohammed Ali. The said Mohammed Ali sold

the suit property to the plaintiff (Sundaram Nadar) under registered

Sale Deed dated 23.12.1978. Plaintiff, thus, claims to be the owner in

possession of the suit property. As the defendants were attempting to

interfere with his possession and raise a cloud over his title, he filed

the said suit.

3. Defendants 1 and 4 remained exparte. Defendant No.2 claimed

that he was not a necessary party to the suit. He however confirmed

that he had purchased the suit property from first defendant on

1.8.1946 and he had mortgaged the said land with possession in

favour of Syeed Kannu. The third defendant (the appellant herein)

contested the suit. He contended that the sale by the first defendant in 3

favour of the second defendant on 1.8.1946 was sham and nominal.

According to him, first defendant sold 10 cents out of the said 14

cents in Survey No.1817 in favour of one Dasan Nadar under

registered Sale Deed dated 22.5.1953. Before such sale, the first

defendant also mortgaged the very same 14 cents of land in favour of

one Mohammed Haneefa on 16.2.1953. The said Muhammed Haneefa

assigned the mortgage in favour of the second defendant on

27.4.1964. The second defendant executed a Release Deed in favour

of Dasan Nadar in regard to 10 cents purchased by him, under Deed of

Release dated 1.8.1966 and thus Dasan Nadar became absolute owner

of 10 cents. Dasan Nadar had also purchased another 2 cents in

Survey No.1817 under Sale Deed dated 1.8.1966 executed by first

defendant and his wife Ammukutty. The said two cents of land

comprised a residential house where first defendant and Ammukutty

were staying and Dasan Nadar filed an eviction suit against them and

obtained possession of the said house under decree dated 21.9.1974.

The said Dasan Nadar thus became the owner in possession of 12

cents of land in Sy.No.1817 and he executed a Deed of Sale dated

22.8.1977 in favour of the third defendant and thus the third defendant

became the absolute owner in possession of 12 cents of land. The 4

third defendant contended that as the Sale Deed dated 1.8.1946 in

favour of second defendant being sham and nominal was void, the

mortgage by second defendant in favour of Syeed Kannu and sale by

Syeed Kannu's son in favour of plaintiff were also void and invalid.

The third defendant therefore sought dismissal of the suit.

4. The trial Court, by its judgment dated 23.8.1982 held that once

first defendant had sold the 14 cents of land in favour of second

defendant under Sale Deed dated 1.8.1946, the first defendant had no

right, title or other interest in the suit property and consequently the

several subsequent transactions relating to suit property by first

defendant, that is the mortgage dated 16.2.1953 in favour of

Muhammed Haneefa, the sale dated 22.5.1953 in favour of Dasan

Nadar as also another Sale dated 9.7.1955 in favour of one

Gopalakrishna Pillai were all ineffective and invalid. The Trial Court

held that plaintiff has established his title with reference to the said

sale dated 1.8.1946 in favour of second defendant, and thereafter

second defendant to Syeed Kannu and Syeed Kannu's son to plaintiff.

It, therefore, decreed the suit as prayed. Feeling aggrieved, the third

defendant filed an appeal. The first appellate court allowed the appeal

by judgment dated 14.3.1984. It accepted the contention of the third 5

defendant that the Sale Deed dated 1.8.1946 was sham and nominal

for three reasons which we will refer to a little later. As a consequence

of its finding that the Sale Deed dated 1.8.1946 by Karunakaran Nadar

(first defendant) in favour of Solomon (second defendant) was sham

and nominal, it held that the subsequent transfers from second

defendant to Syeed Kannu and Syeed Kannu's son to plaintiff were

invalid. The first appellate court also held that the third defendant had

made out his title on the basis of the Sale Deed dated 22.5.1953

executed by first defendant in favour of Dasan Nadar in regard to 10

cents of land, and the Sale Deed dated 1.8.1966 executed by first

defendant and his wife in favour of Dasan Nadar in regard to two

cents and the consequential sale by Dasan Nadar in his favour on

22.8.1977. It, therefore, reversed the decree of the trial court and

dismissed the suit.

5. Feeling aggrieved, the plaintiff filed a second appeal. The High

Court allowed the second appeal. It found that the three reasons given

by the first appellate court to hold that the Sale Deed dated 1.8.1946

was sham and nominal were erroneous and the Sale Deed dated

1.8.1946 was valid and binding; and if so, the title of the plaintiff was

made out and the third defendant could not claim any title on the basis 6

of documents executed by first defendant subsequent to the sale dated

1.8.1946. The Second Appeal was, therefore, allowed and the

judgment of the trial court was restored. The said judgment is under

challenge in this appeal.

6. The question that arises for our consideration is whether the

High Court was justified in reversing the finding of fact that the Sale

Deed dated 1.8.1946 executed by first defendant in favour of second

defendant was sham and nominal. This requires a brief examination of

the three reasons given by the first appellate court to hold the sale

deed dated 1.8.1946 to be sham and nominal.

Reason (i) : The first defendant had executed a Sale Deed dated 9.7.1955 in regard to the very same land in favour of one Gopalakrishna Pillai. That sale was challenged by first defendant's minor son represented by his mother Ammukutty in O.S.No.701/1955. In that suit Solomon Nadar (the second defendant) was arrayed as the fourth defendant as he had been described as a mortgagee in the sale deed dated 9.7.1955. The said suit was decreed ex-parte and in execution of the said ex-parte decree possession of the property was given to Ammukutty representing her minor son through a delivery receipt. Therefore, it has to be inferred that second defendant was never in possession in pursuance of the sale deed dated 1.8.1946.

The High Court has rightly explained how this finding is without any

basis and contrary to the facts. Firstly, in O.S.No.701/1955,

possession was not sought from second defendant. Possession was 7

sought from Gopalakrishna Pillai. After the sale of the schedule

property and delivery of possession to second defendant under deed

dated 1.8.1946, obviously the question of Gopalakrishna Pillai having

possession of the said land did not arise. Further, even second

defendant did not continue to have possession, as he had mortgaged

the suit property with possession in favour of Syeed Kannu on

16.1.1946. Syeed Kannu was not a party to the said suit against

Gopalakrishna Pillai. The said defendant did not contest the suit.

Therefore, if paper possession was shown to have been taken from

Gopalakrishna Pillai in pursuance of an ex parte decree against him,

that cannot be said to be proof of second defendant not being put in

possession of the suit property under Sale Deed dated 1.8.1946.

Therefore, neither the suit filed by first defendant's minor son against

Gopalakrishna Pillai, nor the delivery receipt executed therein would

in any way affect the title or possession of second defendant or his

transferee Syeed Kannu or the plaintiff who was the transferee from

Syeed Kannu's son.

Reason (ii) : After execution of the Sale Deed dated 1.8.1946 in favour of second defendant, first defendant had mortgaged the very same land in favour of Muhammed Haneefa. Second defendant had taken an assignment of the said mortgage from Muhammed Haneefa under the Assignment Deed dated 27.4.1964. If the second defendant 8

was already the owner in pursuance of the Sale Deed dated 1.8.1946, there was no need for him to take the assignment of a subsequent mortgage. Therefore it has to be inferred that the earlier Sale Deed dated 1.8.1946 in favour of second defendant was treated by second defendant as being sham and nominal and in view of it, the second defendant took an assignment of the said mortgage on 27.4.1964.

But what was lost sight of by the first appellate court was the fact that

the Sale Deed dated 1.8.1946 in favour of second defendant related to

10 cents in Survey No.1865, 17 cents in Survey No.1817 and 12 cents

in Survey No.2142 and 10 cents in Survey No.1869. The Assignment

of Mortgage dated 27.4.1964, on the other hand, relates to as many as

sixteen properties. It is possible that second defendant was interested

in taking the assignment because of the mortgage was in respect of

several other properties. It is also possible that while mortgaging the

properties in favour of Muhammed Haneefa, first defendant had

inadvertently included the properties which were already sold under

deed dated 1.8.1946. It is also possible that second defendant did not

want any dispute or litigation with Muhammed Haneefa and therefore

took an assignment. What is relevant for our purpose is that the mere

fact that second defendant had taken an Assignment of the mortgage

from Haneefa, cannot be considered as a circumstance to hold that the 9

Sale Deed dated 1.8.1946 in favour of second defendant was sham

and nominal.

Reason (iii) : The first defendant and his wife Ammukutty sold two cents in Sy.No.1817 in favour of Dasan Nadar. He thereafter filed an eviction suit against first defendant and Ammukutty and took possession from them. This showed that first defendant did not deliver possession to second defendant when he executed the sale deed dated 1.8.1946.

It is evident from the decree in O.S.No.251/1970 (Eviction Suit) that

the suit related to a house which was situated in two cents of land. On

the other hand, the suit property, that is 14 cents in Survey No.1817,

did not relate to any house property at all, but vacant land.

Sy.No.1817 was a large extent of land and what was sold by the first

defendant to second defendant under sale deed dated 1.8.1946 was

only a small portion of 14 cents. It was quite possible that first

defendant had continued to own and possess a house in some portion

of Survey No.1817 which was not the subject matter of the Sale Deed

dated 1.8.1946. Therefore, it is not possible to link the house sold in

favour of Dasan Nadar, with the land sold under the sale deed dated

1.8.1946.

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7. At all events, the fact that after executing the Sale Deed dated

1.8.1946 in favour of second defendant, first defendant went on

executing different Deeds namely a Mortgage Deed dated 16.2.1953,

Sale Deed dated 22.5.1953 and Sale Deed dated 9.7.1955 are not

indications that the first Sale Deed was sham and nominal, but were

indications that first defendant was an unreliable an unscrupulous

person. Further the fact that the second defendant had mortgaged the

suit property (purchased by him on 1.8.1946) with possession to

Syeed Kannu on 16.1.1947 shows that the deed dated 1.8.1946 was

not sham and nominal, but real and acted upon. The said sale has not

been declared as sham and nominal in any proceedings. In this

background, the inference that sale in favour of second defendant

under deed dated 1.8.1946 was sham and nominal, was unwarranted.

8. The High Court has focussed on the crucial issue and concluded

that the findings of the first appellate court that the Deed dated

1.8.1946 is sham and nominal, was an unwarranted inference without

any basis. Consequently, it rightly interfered with the said finding. 11

We, therefore, find no reason to interfere with the judgment of the

High Court. Appeal is dismissed.

..............................J. (R V Raveendran)

New Delhi; .............................J. April 16, 2009. (H.L.Dattu)