Nagubai Ammal & Ors Vs. B. Shama
Rao & Ors [1956] INSC 33 (26 April 1956)
AIYYAR, T.L. VENKATARAMA DAS, SUDHI RANJAN
(CJ) IMAM, SYED JAFFER
CITATION: 1956 AIR 593 1956 SCR 451
ACT:
Lis pendens, Scope of-If prevents passing of
title as between the transferor and the transferee-Nonjoinder of Receiver in
insolvency in the execution proceeding-EffectTransferee pendente lite, if
entitled to attack execution sale on that ground-Limitation and adverse
possession against a purchaser in execution of a decree on a prior
mortgage-Commencement-'Collusive' and 'fraudulent'Distinction--Admission-Evidentiary
value-When can shift the burden of proof -'Maxim that 'a person cannot
approbate and reprobate'-Applicability-Transfer of Property Act (IV of 1882),
s. 52-Indian Limitation Act (IX of 1908), Art. 142.
HEADNOTE:
The appellants as defendants in a suit for
declaration of title to certain building sites sought to resist the
respondents' claim, arising by purchase from a purchaser in a sale in execution
of a mortgage decree passed on a mortgage deed of 1918, by a counter-claim
based on a purchase of the same lands made in 1920 by their predecessor-in-interest
from one of the mortgagors against whom was then pending a suit for maintenance
and for declaration of a charge on the land in suit. That suit was decreed in
1921 and the lands were purchased by the decreeholder in execution of her
decree in 1928. The mortgagor had been adjudged an insolvent in 1926 and the
Official Receiver in whom his estate vested was not made a party to the
execution proceeding. Suit to enforce the mortgage deed of 1918 was brought in
1933 impleading the Official Receiver and the purchaser in execution of the
maintenance and charge decree but not the appellants. In execution of the
decree passed in this suit, the lands in suit were sold to a third party in
1936 and in 1938 the respondent's father purchased them.
The respondent did not specifically raise the
question of lis pendens in his pleading nor was an issue framed on the point,
but he raised the question at the very commencement of the trial in his
deposition, proved relevant documents which were admitted into evidence without
any objection from the appellants who filed their own documents, cross-examined
the respondent and invited the court to hold that the suit for maintenance and
a charge and the connected proceedings evidenced by these documents were
collusive in order to avoid the operation of s. 52 of the Transfer of Property
Act. The District Judge held that the appellants' title acquired by the
purchase of 1920 was extinguished by the sale held in execution of the charge
decree by the operation of s. 52 of the Transfer of Property 59 452 Act and
decreed the suit and his decision was affirmed by the High Court in appeal.
Hold, that the decisions of the courts below
were correct and must be affirmed.
That in the facts and circumstances of the
case the omission of the respondent to specifically raise the question of lis
pendens in his pleading did not take the appellants by surprise and was a mere
irregularity which resulted in no prejudice to them.
Rani Chandra Kunwar v. Chaudhri Narpat Singh
([1906] L.R. 34 I.A. 27), applied.
Siddik Mahomed Shah v. Mt. Saran and Others
(A.I.R. 1930 P.C. 57), explained and held inapplicable.
That s. 52 of the Transfer of Property Act
did not prevent the vesting of title in a transferee in a sale pendente lite
but only made it subject to the rights of other parties as decided in the suit
and subsequent insolvency of the transferor could not, therefore, vest any
title in the Official Receiver or make the title of the execution purchaser
liable to attack on the ground that the Receiver was not made a party to the
execution proceeding. That even assuming that title could not wholly pass by a
transfer pendento lite and some interest would still subsist in the transferor
to vest in the Receiver, the lands in suit having been sold in execution of a
charge decree, the sale would at the most be not binding on him and he could,
if he so chose, move to set it aside; but the transferee pendente lite or his
representative could not be allowed to make his nonjoinder a ground for
attacking the sale.
Wood v. Surr ([1854) 19 Beav. 551), applied.
Inamullah Khan v. Shambhu Dayal (A.I.R. 1931
All. 159), Subbaiah v. Ramasami Goundan (I.L.R. [1954] Mad. 80) and Kala Chand
Banerjee v. Jagannath Marwari ([1927] L.P. 54 I.A. 190), referred to.
That no question of limitation or adverse
possession really arose in the case. It was well settled that a claim of
adverse possession could not affect the right of a prior mortgagee to bring the
properties to sale and adverse possession against the purchaser under that sale
could not commence prior to the date of sale.
Held further, that there was a fundamental
distinction between a collusive and a fraudulent proceeding in that while the
former was the result of an understanding between the parties, both the claim
and the contest being fictitious, and the purpose to confound third parties, in
the latter the contest was real, though the claim was untrue, and the purpose
to injure the defendant by a verdict of the court obtained by practising fraud
in it;
that an admission was a mere piece of
evidence and could not be conclusive except by way of estoppel when it had been
acted 453 upon to his detriment by the person to whom it was made, the weight
to be attached to it depending on the circumstances of each case, and the onus
of proving that it was not true could not shift to the maker of it unless it
was so clear and unambiguous as to be conclusive in absence of any explanation
from him.
Slatterie v. Pooley, ([1840] 6 M. & W.
664) and Rani Chandra Kunwari v. Choudhri Narpat Singh ([1906] L.R. 34 I.A.
27), referred to.
That the maxim that 'a person could not
approbate and reprobate' had its origin in the doctrine of election and was
confined to reliefs arising out of one and the same transaction and against the
parties to it. Where, however, there was no question of election, as the relief
claimed was one and the same, although based on different and inconsistent
grounds, the maxim had no application.
Verschures Creameries Ltd. v. Hull and
Netherlands Steamship Company Ltd. ([1921] 2 K.B. 608), considered and
distinguished.
CIVIL APPELLATE JURISDICTION: Civil Appeal
No. 216 of 1953.
On appeal from the judgment and decree dated
the 8th March, 1951 of the Mysore High Court in Regular Appeal No. 123 of
1947-48 arising out of the decree dated the 23rd June 1947 of the Court of
District Judge, Bangalore in Original Suit No. 84 of 1945-46.
K. S. Krishnaswami Iyengar and M. S. K.
Sastri for the appellants.
R. Ganapathy Iyer and K. R. Krishnaswamy for
the respondent No. 1.
1956. April 26. The Judgment of the Court was
delivered by VENKATARAMA AYYAR J.-This appeal arises out of a suit instituted
by one Krishna Rao, since deceased, and now represented by his son and heir,
the respondent herein, for a declaration of his title to certain building sites
situate in Bangalore in the State of Mysore, and for consequential reliefs.
These properties belonged to one Munuswami, who died leaving him surviving his
third wife Chellammal., three sons by his predeceased wives, Keshavananda, 454
Madhavananda and Brabmananda, and three minor daughters, Shankaramma, Srikantamma
and Devamma. On 1-9-1918 the three brothers executed a usufructuary mortgage
for Rs. 16,000 in favour of one Abdul Huq over a bungalow and vacant sites including
the properties concerned in this litigation. A period of three years was fixed
for redemption. There was a lease back of the properties by the mortgagee to
the mortgagors on 3-9-1918, and it was also for a period of three years. On
6-9-1918 the three brothers effected a partition under a deed, Exhibit K, which
provided inter alia that they were to pay each a sum of Rs. 8 per mensem to
their step-mother, Chellammal, for her maintenance, and that their step-sisters
should be under their protection.
On 6-6-1919 Chellammal presented a plaint in
forma pauperis claiming maintenance and praying that it might be charged on the
properties specified in the plaint. That was Miscellaneous Case No. 377 of
1918-19. At the same time, she also presented as the next friend of her minor
daughters, Srikantamma and Devamma, two plaints in forma pauperis, Miscellaneous
Cases Nos. 378 and 379 of 1918-19 claiming maintenance and marriage expenses
for them, and praying that the amounts decreed might be charged on the
schedule-mentioned properties. The properties which are involved in this suit
are included in item 8 in schedule A annexed to all the three plaints. On
17-6-1920 permission to sue in forma pauperis was granted in all the three
cases, and they were registered as Suits Nos. 98 to 100 of 1919-20.
We are concerned in this appeal with only one
of them, the suit of Devamma which was Miscellaneous Case No. 379 of 1918-19,
subsequently registered as Suit No. 100 of 1919-20.
The suits were contested, and decreed after
trial on 12-121921. The decree in 0. S. No. 100 of 1919-20 directed the
defendants each to pay to the plaintiff a sum of Rs.6 per mensem for
maintenance until her marriage and Rs. 1,500 for marriage expenses, and the
payment of the amount was made a first charge on the properties. In execution
of this decree, the 455 properties with which we are now concerned, were sold
on 2-8-1928 and purchased by Devamma, the decree-holder. A sale certificate was
issued to her on 21-11-1930 (Exhibit J5). Proceedings were also taken in
execution of the decrees obtained by Chellammal and Srikantamma and of one Appalaraju,
and all the properties comprised in the mortgage were sold and purchased by
third parties. It must be mentioned that all the three brothers were
adjudicated insolvents on their own application, Brahmananda by an order dated
23-3-1923 in Insolvency Case No. 7 of 1921-22 and Keshavananda and Madhavananda
by an order dated 19-2-1926 in Insolvency Case No. 4 of 1925-26. It also
appears from the evidence of D.W. 5 that at about this time all of them left
the place.
While these proceedings were going on, Abdul
Huq, the mortgagee, filed on 16-8-1921, O.S. No. 27 of 192122 against
Keshavananda and his two brothers for recovery of arrears of rent due by them
under the lease deed, and obtained a decree on 21-10-1921 but was unable to
realise anything in execution thereof, and the execution petition was finally
dismissed on 22-1-1926. He then filed a second suit against the mortgagors,
O.S. No. 86 of 1931-32, for arrears of rent for a period subsequent to that
covered by the decree in O.S. No. 27 of 1921-22 and for possession of the
properties on the basis of the lease dated 3-9-1918, and obtained a decree on
22-3-1932 but was unable to get possession, as the properties were in the
occupation of third parties under claims of right. Abdul Huq died on 20-3-1933,
and thereafter, his legal representatives filed on 30-8-1933 O.S. No. 8 of
1933-34 to enforce their rights under the mortgage deed dated 1-9-1918. Among
the defendants who were impleaded in this suit were the mortgagors Keshavananda
and Madhavananda, Gururaja, son of Brabmananda who bad died, the Official
Receiver and the purchasers of the mortgaged properties in execution of the
maintenance decrees and the decree of Appalaraju. Devamma was the third
defendant in this action. The plaint alleged that the mortgagors had failed to
456 pay rent as provided in the lease deed dated 3-9-1918, and had suffered
collusive decrees to be passed against them in the maintenance suits and other
actions, and that properties had been sold fraudulently in execution of those
decrees.
On the basis of these allegations, the
plaintiffs prayed for a decree for possession as against the purchasers
including Devamma, and for a sum of Rs. 5,000 as damages. In the alternative,
they prayed for a decree for sale of the mortgaged properties for the amount
due under the mortgage.
The suit was contested, and issues raised as
to whether the sales were collusive, and whether the plaintiffs were entitled
to possession and damages, and alternatively, as to what amounts were payable
under the mortgage and to what reliefs the plaintiffs were entitled. At the
trial, the plaintiffs abandoned the relief as to possession and damages, and it
accordingly became unnecessary to go into the question as to the collusive
character of the maintenance decrees and the execution sales. On 26-9-1935 a
decree was passed determining the amount payable to the plaintiffs on
redemption, providing for payment thereof on or before 26th January 1936, and
in default, directing the sale of the properties. In execution of this decree,
the properties were sold in court-auction sometime in 1936, and purchased by
one Chapman, and possession was taken by him through court on 18-2-1937. On
25-1-1938, Saldhana, who was the agent of Chapman, and became his executor on
his death, sold the building sites now in dispute and forming part of the
properties purchased in court auction, to Krishna Rao, the plaintiff in the
present action. When Krishna Rao attempted to take possession of the sites, he
was obstructed by one Garudachar, claiming title under a sale deed dated 112-1932
executed by one Lokiah, the husband of Srikantamma, sister of Devamma, and be
accordingly filed O.S. No. 92 of 1938-39 in the court of the Subordinate Judge,
Bangalore for establishing his title to the suit properties, and for an
injunction restraining Garudachar from interfering with his possession. The 457
suit was decreed on 23-7-1940, and the matter having been taken in appeal to
the High Court by Garudachar, the parties entered into a compromise, and a decree,
Exhibit E-1, was passed in terms thereof on 18-9-1942. Under this decree., the
title of the plaintiff to the suit properties was recognised. After obtaining
this decree, Krishna Rao started building on the sites, when he met with fresh
obstruction, this time from the appellants who set up that they were in
possession under a claim of title.
Under the partition deed entered into by the
mortgagors on 6-9-1918 (Exhibit K), Keshavananda was allotted two plots, Nos. 3
and 4 to the west of East Lal Bagh Road in the plan, Exhibit G. These are the
very plots, which form the subjectmatter of the present suit. On 30-1-1920
Keshavananda conveyed these properties to Dr. Nanjunda Rao under a deed of
sale, Exhibit VI. There was on the same date a sale by Brahmananda of plots
Nos. 1 and 2 to Dr. Nanjunda Rao, but those properties are not involved in this
litigation. On the death of Dr. Nanjunda Rao, his sons partitioned the
properties, and in the division the suit properties fell to the share of one
Raghunatha Rao, and on his death in 1938) his estate devolved on his widow,
Nagubai, who is the first appellant. On 28-5-1939 she executed a trust deed
settling a moiety of these properties on the Anjaneyaswami Temple at Karaikal,
and the trustees of that institution are the other appellants in this appeal.
In view of their obstruction, Krishna Rao instituted the suit out of which the
present appeal arises, for a declaration of his title to the sites in question,
and for an injunction restraining the defendants from interfering with his
possession, or in the alternative, for a decree in ejectment if they were held
to be in possession. The claim made in the plaint is a simple one. It is that
the title of Chapman as purchaser in execution of the decree passed on the mortgage
dated 1-91918 prevailed against all titles created subsequent to that date, and
that accordingly Dr. Nanjunda Rao and his successors acquired under the sale
deed dated 30-1-1920 no title which could be 458 set up as against that of the
plaintiff. The defendants contested the suit on the ground, firstly, that as
they were not impleaded as parties in the suit on the mortgage, O.S.
No. 8 of 1933-34, their right of redemption
remained unaffected by the decree passed therein or the sale in execution thereof;
and secondly, that the suit was barred by limitation, because the plaintiff was
not in possession within 12 years of the suit, and also because the defendants
had acquired title to the suit properties by adverse possession for over 20
years.
The District Judge of Bangalore, who tried
the suit, held that the title of Dr. Nanjunda Rao to the suit properties under
the sale deed dated 30-1-1920 was, under section 52 of the Transfer of Property
Act, subject to the result of the maintenance suit of Devamma (O.S. No. 100 of
1919-20), and was in consequence extinguished by the purchase by her in
execution of the charge decree in that suit. On the question of limitation, the
learned Judge held that the plaintiff had established possession of the
properties within 12 years of the suit, and that the defendants had failed to
establish title by adverse possession. In the result, he granted a decree in
favour of the plaintiff for possession of the suit properties. The defendants
appealed to the High Court, Mysore and by their judgment dated 8-31951 the
learned Judges agreed with the District. Judge that by reason of section 52 of
the Transfer of Property Act, the title of Dr. Nanjunda Rao based on the deed
dated 30-1-1920 came to an end when Devamma purchased the properties in
execution of her maintenance decree, and dismissed the appeal, but granted a
certificate under article 133(1) of the Constitution, and that is how the
appeal comes before us.
Notwithstanding the tangle of legal
proceedings extending over 30 years, which forms the background of the present
litigation, the single and sole question that arises for decision in this suit
is whether the sale deed dated 30-11920 under which the appellants claim is
subject to the result of the sale dated 2-8-1928 in execution of the decree in
O.S. No.100 of 459 1919-20 by reason of the rule of lis pendens enacted in
section 52 of the Transfer of Property Act. If it is, it is not in dispute that
it becomes avoided by the purchase by Devamma on 2-8-1928. If it is not, it is
equally indisputable that the appellants as purchasers of the equity of
redemption from Keshavananda have a right to redeem the mortgage dated
1-9-1918, and not having been impleaded in O.S. No. 8 of 1933-34 are not bound
either by the decree passed therein or by the sale in execution thereof.
On this question, as the plaint in O.S. No.
100 of 1919-20 praying for a charge was presented on 6-6-1919, the sale to Dr.
Nanjunda Rao subsequent thereto on 30-1-1920 would prima facie fall within the
mischief of section 52 of the Transfer of Property Act, and would be hit by the
purchase by Devamma on 2-8-1928 in execution of the charge decree. Sri K. S.
Krishnaswami Ayyangar, learned counsel for
the appellants, did not press before us the contention urged by them in the
courts below that when a plaint is presented in forma pauperis the lis
commences only after it is admitted and registered as a suit, which was in this
case on 17-6-1920, subsequent to the sale under Exhibit VI--a contention
directly opposed to the plain language of the Explanation to section 52. And he
also conceded and quite rightly, that when a suit is filed for maintenance and
there is a prayer that it be charged on specified properties, it is a suit in
which right to immovable property is directly in question, and the lis
commences on the date of the plaint and not on the date of the decree, which
creates the charge. But he contends that the decision of the courts below that
the sale deed dated 30-1-1920 is hit by section 52 is bad on the following
three grounds: (1) The question of lis pendens was not raised in the pleadings,
and is not open to the plaintiff. (2 The suit for maintenance, O.S. No. 100 of
1919-20 and the sale in execution of the decree passed therein are all
collusive, and section 52 has accordingly no application. (3) The purchase by
Devamma in execution of the decree in O.S. No. 160 of 1919-20 on 2-8-1928 is
void and inoperative, as the Official Receiver in whom 60 460 the estate of
Keshavananda had vested on 19-2-1926 was not a party to the sale proceedings.
The e contentions must now be considered.
1. We see no substance in the contention that
the plea of lis pendens is not open to the plaintiff on the ground that it had
not been raised in the pleadings. It is true that neither the plaint nor the
reply statement of tile plaintiff contains any averment that the sale is
affected by the rule of lis pendens. Nor is there any issue specifically
directed to that question. It is argued for the respondent that the allegations
in para 4 of the plaint and in. para 5 of the reply statement that Dr. Nanjunda
Rao being a transferee subsequent to the mortgage could claim no right
"inconsistent with or superstar to those of the mortgagee and the
auction-purchaser" are sufficiently wide to embrace this question, and
reference was made to issue No. 3 which is general in character. Even if the
plaintiff meant by the above allegations to raise the plea of lis pendens, he
has not expressed himself with sufficient clearness for the defendants to know
his mind, and if the matter had rested there, there would be much to be said in
favour of the appellant's contention. But it does not rest there.
The question of lis pendens was raised by the
plaintiff at the very commencement of the trial on 8-3-1947 when he went into
the witness-box and filed in his examination-in-chief Exhibit J series,
relating to the maintenance suits, the decrees passed therein and the
proceedings in execution thereof, including the purchase by Devamma. This
evidence is relevant only with reference to the plea of lis pendens, and it is
significant that no objection was raised by the defendants to its reception.
Nay, more. On 13-3-1947 they cross-examined the plaintiff on the collusive
character of the proceedings in Exhibit J series, and filed documents in proof
of it, The trial went on thereafter for nearly three months, the defendants
adduced their evidence, and the bearing was concluded on 2-6-1947. In the
argument before the District Judge, far from objecting to the plea of lis
pendens being permitted to be raised, the defendants argued 461 the question on
its merits, and sought a decision on the evidence that the proceedings were
collusive in character, with a view to avoid the operation of section 52 of the
Transfer of Property Act. We are satisfied that the defendants went to trial
with full knowledge that the question of lis pendens was in issue, had ample
opportunity to adduce their evidence thereon, and fully availed themselves of
the same, and that, in the circumstances, the absence of a specific pleading on
the question was a mere irregularity, which resulted in no prejudice to them.
It was argued for the appellants that as no
plea of lis pendens was taken in the pleadings, the evidence bearing on that
question could not be properly looked into, and that no decision could be given
based on Exhibit J series that the sale dated 30-1-1920 was affected by lis;
and reliance was placed on the observations of Lord Dunedin in Siddik Mahomed
Shah v. Mt. Saran and others(1) that "no amount of evidence can be looked
into upon a plea which was never put forward". The true scope of this rule
is that evidence let in on issues on which the parties actually went to trial
should not be made the foundation for decision of another and different issue,
which was not present to the minds of the parties and on which they bad no
opportunity of adducing evidence. But that rule has no application to a case
where parties go to trial with knowledge that a particular question is in
issue,tbough no specific issue has been framed thereon, and adduce evidence
relating thereto. The rule applicable to this class of cases is that laid down
in Rani Chandra Kunwar v. Chaudhri Narpat Singh: Rani Chandra Kunwar v. Rajah
Makund Singh(2). There, the defendants put forward at the time of trial a
contention that the plaintiff had been given away in adoption, and was in
consequence not entitled to inherit. No such plea was taken in the written
statement; nor was any issue framed thereon. Before the Privy Council, the
contention was raised on behalf of the plaintiff that in view of the pleadings,
the question of adoption was not open to the defendants. It was (1) A.I.R. 1930
P.C. 57.
(2) [1906-07] L.R. 34 I A. 27.
462 held by Lord Atkinson overruling this
objection that as both the parties had gone to trial on the question of
adoption, and as the plaintiff had not been taken by surprise, the plea as to
adoption was open to the defendants, and indeed, the defendants succeeded on
that very issue. This objection must accordingly be overruled.
2.It is next contended that section 52 of the
Transfer of Property Act does not operate to extinguish the title of Dr.
Nanjunda Rao and his successors under the
sale dated 30-11920, because the proceedings which resulted in the decree in 0.
S. No. 100 of 1919-20 and the sale in execution thereof on 2-8-1928 were all
collusive. Whether they were so or not is essentially a question of fact, and
both the courts below have concurred in answering it in the negative.
It is contended for the appellants that this
finding is the result of an error into which the learned Judges of the High
Court fell as to the incidence of burden of proof, and it should not therefore
be accepted. The argument is that Abdul Huq, his legal representatives and the
plaintiff himself bad admitted again and again in judicial proceedings taken
with reference to the suit properties that the decree and sale in 0. S. No. 100
of 1919-20 were collusive, and that, in consequence, even if the initial onus
of establishing this fact was on the defendants, that was shifted on to the
plaintiff on proof of the abovementioned admissions, and as there was no
evidence worth the name on his side to explain them, he must fail.
We must now examine the several statements
which are relied on by the appellants as admissions, ascertain what their true
import is, and determine what weight should be attached to them. On 27-6-1932
Abdul Huq moved the insolvency court for a direction to the Official Receiver
to take possession of the mortgaged properties, which were stated to be in the
occupation of one Lokiah. This Lokiah, it has been already mentioned, is the
husband of Srikantamma, the sister of Devamma, he having married her after the
maintenance suits had been decreed and sometime 463 prior to the court auction
in 1928. In his petition, Abdul Huq alleged that Lokiah conducted proceedings
in execution of the decree in O.S. No. 100 of 1919-20 in collusion with the
insolvents and without notice to the Official Receiver, and purchased the properties
in court auction on 2-8-1928 on behalf of the decree-holder. The decree itself
was not attacked as collusive, and as for the sale dated 2-8-1928 it was
distinctly alleged in para 3 of the petition that the purchase by Lokiah was
for the benefit of Devamma. The substance of the complaint of Abdul Huq was
that the execution proceedings and the sales were fraudulent, and intended to
defeat his rights to the rents and profits from the properties. In other words,
the ground of attack on the sale dated 2-8-1928 was not that it was unreal and
collusive, but that it was real but fraudulent.
Now, there is a fundamental distinction
between a proceeding which is collusive and one which is fraudulent.
"Collusion in judicial proceedings is a secret arrangement between two
persons that the one should institute a suit against the other in order to
obtain the decision of a judicial tribunal for some sinister purpose".
(Wharton's Law Lexicon, 14th Edition, page 212). In such a proceeding, the
claim put forward is fictitious, the contest over it is unreal, and the decree
passed therein is a mere mask having the similitude of a judicial determination
and worn by the parties with the object of confounding third parties. But when
a proceeding is alleged to be fraudulent, -what is meant is that the claim made
therein is untrue, but that the claimant has managed to obtain the verdict of
the court in his favour and against his opponent by practising fraud on the
court. Such a proceeding is started with a view to injure the opponent, and
there can be no question of its having been initiated as the result of an
understanding between the parties. While in collusive proceedings the combat is
a mere sham, in a fraudulent suit it is real and earnest. The allegations in
the petition of Abdul Huq set out above show that the suit itself was not
attacked as collusive, but that the execution 464 proceedings were impeached as
fraudulent. It should be mentioned that on this petition the District Judge
passed an order on 30-6-1932 directing the Official Receiver to take the
necessary steps and report. But nothing came out of this.
We next come to a petition filed after the
death of Abdul Huq by his legal representatives asking for permission of the
insolvency court to institute a suit on the mortgage dated 1-9-1918 impleading
the Official Receiver as party.
The allegations made in the petition are on
the same lines as those made by Abdul Huq in his petition dated 27-6-1932, and
they do not carry the matter any further. This petition was ordered, and on
30-8-1933 O.S. No. 3 of 1933-34 was instituted. In this suit, as already
stated, the plaintiffs sought to recover possession of the properties on foot
of the usufructuary mortgage, and ancillary to that relief, they claimed
damages from the defendants who were in possession, on the ground that the
execution proceedings under which they got into possession were collusive and
fraudulent. Thus far, the allegations are a mere repetition of what bad been
stated in the prior proceedings. But the plaint in the suit went further, and
stated for the first time that the proceedings in O.S. No. 100 of 1919-20 and
the decree passed therein were collusive. But these allegations were made only
as the basis of the claim for damages for non-payment of rent under the lease
deed dated 3-9-1918 and non-surrender of possession of the properties, and
their true import is that the suit was fraudulent and intended to deprive the
mortgagee of the rents and profits to which be was entitled. At the trial, as
already stated, the relief for possession and damages was given up, the
question as to the collusive character of the sale was abandoned, and a decree
for sale was passed. These proceedings are open to the same comment as was made
on the petition of Abdul Huq, and do not assist the defendants.
It remains to deal with a proceeding to which
the present plaintiff was a party. It will be remembered that after his
purchase be was obstructed in his 465 possession by one Garudachar, and he had
to file O.S. No. 92 of 1938-39 to establish his title against him. In his
plaint in that suit he stated, obviously adopting what Abdul Huq and his legal
representatives had previously alleged, that the decree in O.S. No. 100 of
1919-20 and the execution sale on 2-8-1928 were collusive. On behalf of the
appellants, a contention is urged that as the plaintiff obtained a decree in
O.S. No. 92 of 1938-39 on the strength of the above allegations, it is not open
to him in these proceedings to go back on them, and plead the contrary.
That is a contention which will be presently
considered.
But apart from that, the statements of the
plaintiff in his plaint in O.S. No. 92 of 1938-39 considered purely as
admissions, do not carry the matter beyond the point to which the statements
made by Abdul Huq and his legal representatives in the prior proceedings take
us. The question then is, what is the effect to be given to these statements?
An admission is not conclusive as to the truth of the matters stated therein.
It is only a piece of evidence, the weight to be attached to which must depend
on the circumstances under which it is made. It can be shown to be erroneous or
untrue, SO long as the person to whom it was made has not acted upon it to his
detriment, when it might become conclusive by way of estoppel. In the present
case, there is no question of estoppel, as the title of Dr. Nanjunda Rao arose
under a purchase which was long prior to the admissions made in 1932 and in the
subsequent years. It is argued for the appellants that these admissions at the
least shifted the burden on to the plaintiff of proving that the proceedings
were not collusive, and that as he gave no evidence worth the name that these
statements were made under a mistake or for a purpose and were, in fact, not
true, full effect must be given to them. Reliance was placed on the well known
observations of Baron Park in Slatterie v. Pooley(1) that "what a party
himself admits to be true may reasonably be presumed to be so", and on the
decision in Rani Chandra Kunwar v. Chaudhri (1) [1840] 6 M. & W. 664, 669;
151 E.R. 579, 581.
466 Narpat Singh: Rani Chandra Kunwar v.
Rajah Makund Singh(1), where this statement of the law was adopted. No
exception can be taken to this proposition. But before it can be invoked, it
must be shown that there is a clear and unambiguous statement by the opponent,
such as will be conclusive unless explained. It has been already pointed out
that the tenor of the statements made by Abdul Huq, his legal representatives
and the plaintiff was to suggest that the proceedings in 0. S. No. 100 of
1919-20 were fraudulent and not collusive in character. Those statements would
not, in our opinion, be sufficient, without more, to sustain a finding that the
proceedings were collusive.
But assuming that they are sufficient to
shift the burden on to the plaintiff of proving that the decree and sale in 0.
S. No. 100 of 1919-20 were not collusive, the
evidence adduced by him is, in our opinion, ample to discharge that burden. He
has filed Exhibit J series, which give a complete picture of the proceedings in
0. S. No. 100 of 1919-20. Under the partition deed, Exhibit K,it will be
remembered, the brothers agreed to pay a monthly maintenance of Rs. 8 each to
their step-mother, Chellammal. This, however, was not charged on the family
properties. With reference to their step-sisters, Srikantamma and Devamma, the
provision was simply that the brothers should protect them. It will also be
remembered that under the partition Keshavananda and Brahmananda each got two
vacant sites in full quit of their shares. It appears from Exhibit J-10,
paragraph 2, that the two brothers were contemplating the disposal of their
plots, in which case the claim of Chellammal and the step-sisters to
maintenance would be defeated. It became accordingly necessary for them to
safeguard their rights, and for that purpose, to file suits for maintenance and
claim a charge therefor on the family properties. That the apprehensions of
Chellammal were wellfounded is established by the fact that the two brothers
entered into agreements for the sale of their vacant sites to Dr. Nanjunda Rao
on 20-10-1919, and sale deeds were actually executed (1) [1906-07] L.R. 34 I.A.
27.
467 pursuant thereto on 30-1-1920. There
cannot be any doubt, therefore, that the suits were bona fide. This conclusion
is further reinforced when regard is had to the conduct of the litigation. Two
of the brothers contested the suit. It underwent several adjournments, and was
heard finally in December 1921. At the trial, a number of witnesses were examined
on either side, and the judgment, Exhibit J-6, shows that the contest centred
round the quantum of maintenance payable to the plaintiffs, and it was keen,
even bitter. When at last the plaintiffs obtained decrees, they had no easy
time of it in realising the fruits thereof. The troubles of a creditor, it has
been said, begin after he obtains a decree, and so it was with the plaintiffs.
Exhibit J-4 shows that Devamma had to file
several applications for execution, before she could finally bring the properties
to sale and in view of the heavy encumbrances to which they were subject, she
had herself to purchase them on 2-8-1928. The sale was confirmed on 21-11-1930,
and the sale certificate, Exhibit J-5, was issued, and she got into possession.
To sum up, the claim on which the suit was laid was true and honest; it was
hotly contested by the defendants, and prolonged proceedings in execution had
to be taken for realising the fruits of the decree. These are facts which are
eloquent to show that the suit in O.S. No. 100 of 1919-20 and the sale on
2-8-1928 were not collusive.
The plaintiff also went into the box, and
stated in cross examination that though when he filed 0. S. No. 92 of 193839 he
had thought that the proceedings were collusive, he now thought otherwise.
Counsel for the appellants strongly criticised this evidence, and contended
that in the absence of facts as to why he chanced his mind, the statement of
the plaintiff that he now thought otherwise was worthless. But then, the
plaintiff as also Abdul Huq and his legal representatives were utter strangers,
and their statement about the collusive character of the proceedings, in O.S.
No. 100 of 1919-20 could only be a matter of
inference. If on the materials then before him the plaintiff could have thought
that those proceedings 468 were collusive, there is no reason why on the
materials now before him he could not think otherwise. It was open to the
defendants to have further crossexamined him about the materials which led him
to change his opinion, but they chose not to pursue the matter. Both the courts
below have, on a careful consideration of the record, come to the conclusion
that the proceedings in O.S. No. 100 of 1919-20 were not collusive, and we do
not see sufficient grounds for disturbing that finding, which must be affirmed.
We shall now deal with the contention of the
appellants that in view of what happened in O.S. No. 92 of 1938-39 it is not
open to the plaintiff to plead in these proceedings that the decree and sale in
O.S. No. 100 of 1919-20 are not collusive. It is argued that in his plaint in
O.S. No. 92 of 1938-39 the plaintiff alleged that the proceedings in O.S, No.
100 of 1919-20 were collusive, adduced evidence in proof of these allegations,
persuaded the court to give a finding to that effect, and obtained a decree on
the basis of that finding, and he cannot therefore be permitted in this
litigation to change his front and plead that the proceedings in O.S. No. 100
of 1919-20 are not collusive and succeed on it. This bar arises, it is argued,
on the principle that a person cannot both approbate and reprobate.
Now, the facts relating to the litigation in
O.S. No. 92 of 1938-39 are that Garudachar set up title to the suit properties
under a purchase dated 1-12-1932 from Lokiah, and it was the truth and validity
of this sale that was really in question in that suit. Lokiah purchased these
and other properties in execution of the money decree of one Appalaraju, and
therefore his title cannot prevail as against that of Devamma under the
purchase under the charge decree on 2-8-1928. In his plaint in O.S. No. 92 of
193839, the plaintiff attacked the purchases of both Devamma and of Lokiah as
fraudulent and collusive. But, in fact, as Garudachar did not claim any title
under Devamma, there was no need to attack the purchase by her on 2-8-1928. The
suit was contested, 469 and in the judgment that was given, Exhibit E, the
title of the plaintiff was upheld and a decree granted in his favour.
There was an appeal against the decree by
Garudachar, R.A. No. 101 of 1940-41, and that was disposed of on a compromise
by the parties, under which the title of the plaintiff to the suit properties
was affirmed and Garudachar was granted some other vacant sites in satisfaction
of his claim. It is difficult to say on these facts that the allegation of the
plaintiff that the proceedings in O.S. No. 100 of 1919-20 were collusive was
either the foundation of his claim, or that he obtained any benefit under the
decree on that basis.
Counsel for the appellants sought to rely on
the findings in Exhibit E, as establishing that the proceedings in O.S. No. 100
of 191920 were collusive. But as that judgment was not inter parties, the
findings therein are inadmissible in this litigation, and, moreover, there
having been an appeal against that judgment, the findings in Exhibit E lost
their finality, and when the parties settled their claim by granting to
Garudachar another property in substitution, they ceased to possess any force
even inter parties.
But it is argued by Sri Krishnaswami Ayyangar
that as the proceedings in 0. S. No. 92 of 1938-39 are relied on as barring the
plea that the decree and sale in 0. S. No. 100 of 1919-20 are not collusive,
not on the ground of resjudicata or estoppel but on the principle that a person
cannot both approbate and reprobate, it is immaterial that the present
appellants were not parties thereto, and the decision in Verschures Creameries
Ltd. v. Hull and Netherlands Steamship Company Ltd.(1), and in particular, the
observations of Scrutton, L.J., at page 611 were quoted in support of this
position. There, the facts were that an agent delivered goods to the customer
contrary to the instructions of the principal, who thereafter filed a suit
against the purchaser for price of goods and obtained a decree. Not having
obtained satisfaction, the principal next filed a suit against the agent for
damages on the ground of negligence and (1) (1921] 2 K B. 608.
470 breach of duty. It was held that such an
action was barred.
The ground of the decision is that when on
the same facts, a person has the right to claim one of two reliefs and with
full knowledge he elects to claim one and obtains it, it is not open to him
thereafter to go back on his election and claim the alternative relief. The
principle was thus stated by Bankes, L. J.:
"Having elected to treat the delivery to
him as an authorised delivery they cannot treat the same act as a mis delivery.
To do so would be to approbate and reprobate the same act".
The observations of Scrutton, L. J. on which
the appellants rely are as follows:
"A plaintiff is not permitted to
'approbate and reprobate'.
The phrase is apparently borrowed from the
Scotch law, where it is used to express the principle embodied in our doctrine
of election-namely, that no party can accept and reject the same instrument:
Ker v. Wauchope(1): Douglas-Menzies v. Umphelby(2). The doctrine of election is
not however confined to instruments. A person cannot say at one time that a
transaction is valid and thereby obtain some advantage, to which he could only
be entitled on the footing that it is valid, and then turn round and say it is
void for the purpose of securing some other advantage. That is to approbate and
reprobate the transaction".
It is clear from the above observations that
the maxim that a person cannot 'approbate and reprobate' is only one
application of the doctrine of election, and that its operation must be
confined to reliefs claimed in respect of the same transaction and to the
persons who are parties thereto. The law is thus stated in Halsbury's Laws of
England, Volume XIII, page 454, para 512:
"On the principle that a person may not
approbate and reprobate, a species of estoppel has arisen which seems to be
intermediate between estoppel by record and estoppel in pais, and may
conveniently be referred to here. Thus a party cannot, after taking advantage
under an order (e.g.
payment of costs), (1) [1819] 1 Bli. 1, 21.
(2) [1908] A C. 224, 232, 471 be heard to say
that it is invalid and ask to set it aside, or to set up to the prejudice of
persons who have relied upon it a case inconsistent with that upon which it was
founded; nor will he be allowed to go behind an order made in ignorance of the
true facts to the prejudice of third parties who have acted on it".
The plaintiff obtained no advantage against
the appellants by pleading in 0. S. No. 92 of 1938-39 that the proceedings in
0. S. No. 100 of 1919-20 were collusive; nor did they acting on those pleadings
acquire rights to the suit properties. Nor is there any question of election,
because the only relief which the plaintiff claimed in 0. S. No. 92 of 1938-39
and which he now claims is that he is entitled to the suit properties. Only,
the ground on which that relief is claimed is different and, it is true,
inconsistent. But the principle of election does not forbid it, and there being
no question of estoppel, the plea that the proceedings in 0. S. No. 100 of
1919-20 are not collusive is open to the plaintiff.
3.It was finally contended that the purchase
by Devamma in execution of the decree in 0. S. No. 100 of 1919-20 was void and
conferred no title on her, because the Official Receiver in whom the estate of
Keshavananda, the mortgagor, had vested on his adjudication as insolvent on
19-2-1926 had not been made a party to those proceedings, and that, in consequence,
the title of Dr. Nanjunda Rao and his successors under the sale deed dated
30-1-1920 continued to subsist, notwithstanding the court auction sale on
2-8-1928. The obvious answer to this contention is that the properties which
were sold on 2-8-1928 did not vest in the Official Receiver on the making of
the order of adjudication on 19-21926., as they had been transferred by the
mortgagor, long prior to the presentation of Insolvency Case No. 4 of 192526
under the very sale deed dated 30-1-1920, which forms the root of the
appellants' title. That sale was no doubt pendente lite, but the effect of
section 52 is not to wipe it out altogether but to subordinate it to the rights
based.
on the decree in the suit. As between the 472
parties to the transaction, however, it was perfectly valid, and operated to
vest the title of the transferor in the transferee. Under section 28(2) of the
Insolvency Act, what vests in the Official Receiver is only the property of the
insolvent, and as the suit properties had ceased to be his properties by reason
of the sale deed dated 30-1-1920, they did not vest in the Official Receiver,
and the sale held on 2-8-1928 is not liable to be attacked on the ground that
he bad not been impleaded as a party thereto.
But it is argued for the appellants that
having regard to the words of section 52 that pendente lite "the property
cannot be transferred", such a transfer must, when it falls within the
mischief of that section, be deemed to be non est, that in consequence
Keshavananda must, for purposes of lis pendens, be regarded as the owner of the
properties, notwithstanding that he bad transferred them, and that the Official
Receiver who succeeded to his rights had a right to be impleaded in the action.
This contention gives no effect to the words "so as to affect the rights
of any other party thereto under any decree or order which may be made
therein", which make it clear that the transfer is good except to the
extent that it might conflict with rights decreed under the decree or order. It
is in this view that transfers pendente lite have been held to be valid and
operative as between the parties thereto. It will be inconsistent to bold that
the sale deed dated 30-1-1920 is effective to convey the title to the
properties to Dr.
Nanjunda Rao, and that, at the same time, it
was Keshavananda who must be deemed to possess that title. We are, therefore,
unable to accede to the contention of the appellants that a transferor pendente
lite must, for purposes of section 52, be treated as still retaining title to
the properties.
But assuming that Keshavananda had still some
interest in the properties left even after he had sold them on 30-1-1920 and
that it would vest in the Official Receiver on the making of the order of
adjudication on 19-2-1926, what is its effect on the title of Devamma as
purchaser in court auction in execu473 tion of her charge decree? It has been
held by the Privy Council in Kala Chand Banerjee v. Jagannath Marwari(1) that
when in execution of a mortgage decree properties are sold without notice to
the Official Receiver in whom the equity of redemption had vested prior to the
sale, such sale would not be binding on him. But here, it is not the Official
Receiver, who impeaches the sale as bad. In fact, he was a party to O.S. No. 8
of 1933-34 and would be bound by the sale in execution of the decree therein,
under which the plaintiff claims. It is the purchaser pendente lite in the
charge suit, O.S. No. 100 of 1919-20, that now attacks the sale held on
2-8-1928 as null and void. Is he entitled to do so? Counsel for the respondent
has invited our attention to the decision in Wood v. Surr(2). There, the
mortgagor filed a suit for redemption in 1838. A preliminary decree for
accounts was passed in 1843 and pursuant thereto, a final decree was made in
1848 declaring the amount payable, and time for payment was given till 1849.
The amount not having been paid, the mortgage became foreclosed. During the
pendency of these proceedings, the mortgagor was adjudicated bankrupt in 1844,
but the Official Assignee, in whom the equity of redemption had vested, was not
impleaded in the mortgage action. In 1841, the mortgagor bad created a further
mortgage in favour of one Mrs. Cuppage, and she was not made a party in the
redemption suit. After the foreclosure of the mortgage in 1849, one Mr. Wood
claiming in the rights of Mrs. Cuppage instituted an action to redeem the
mortgage. The question was whether being transferee pendente lite he was bound
by the foreclosure proceedings.
The contention on his behalf was that as the
official assignee was not a party to those proceedings, there had been no
proper foreclosure, and that the whole matter was at large. In negativing this
contention, Sir John Romilly, M. R. observed:
"There can be no question but that the
suit (Davis's suit) was defective by reason of no notice having been taken of
the insolvency. The proceeding (1) [1927] L, R. 54 T.A. 190, (2) [1854] 19
Beav. 551; 52 E.R, 465, 474 having gone on exactly as if no insolvency had
taken place, the subsequent proceedings would, in my opinion, be wholly
inoperative against the assigneein-insolvency and if he thought fit to contest
the validity of the decree of foreclosure against Davis, it could not be held
to be binding on such assignee. But that does not conclude the question, which
really is, whether the plaintiff who, but for this, would in truth have been
bound, can take advantage of this objection. I am of opinion that although the
suit was undoubtedly defective, by reason of this insolvency, the assignee
alone could take advantage of this defect. It is obvious that Davis himself
could not take advantage of it, or if from any subsequent cause, or any
subsequent circumstance, the insolvency or bankruptcy had been superseded or
annulled, he could not have said that the foreclosure was not absolute against
him".
These observations directly cover the point
now in controversy, and they embody a principle adopted in the law of this
country as to the effect of a sale in execution of a decree passed in a
defectively constituted mortgage suit.
Such a sale, it has been held, does not
affect the rights of redemption of persons interested in the equity of
redemption, who have not been impleaded as parties to the action as they should
have been under Order 34, Rule 1, Civil Procedure Code but that it is valid and
effective as against parties to the action. This rule has been affirmed even
when the person in whom the equity of redemption had vested is the Official
Receiver, and he had not been made a party to the proceedings resulting in
sale. Vide Inamullah Khan v. Shambhu Dayal(1) and Subbaiah v. Ramasami
Goundan(2). We should accordingly hold that even assuming that the equity of
redemption in the suit properties vested in the Official Receiver on the
adjudication of Keshavananda, his non-joinder in the execution proceedings did
not render the purchase by Devamma a nullity, and that under the sale she
acquired a good and impeccable title, subject to any right which the Official
Receiver (1) A.I.R. 1931 All. 159.
(2) I.L.R. [1954] Mad, 80.
475 might elect to exercise, and it is not
open to attack by the transferee pendente lite under the deed dated 30-1-1920 and his representatives, the present appellants. In the result, we agree with
the courts below that the title of the appellants has been extinguished under
section 52 of the Transfer of Property Act, by the court sale dated 2-8-1928.
It must be mentioned that the appellants also
pleaded that the suit was barred by limitation under article 142 on the ground
that the plaintiff and his predecessors had not been in possession within 12
years of the suit, and that further the defendant had acquired title by adverse
possession commencing from 1920. The learned District Judge, found on both the
issues in favour of the plaintiff, and though the correctness of these findings
was attacked in the grounds of appeal to the High Court, there is no discussion
of the question in the judgment of the learned Judges, and we must take it that
the point had been abandoned by the appellants.
We accordingly declined to hear them on this
question. We may add that the question of limitation cannot really arise on the
facts of this case, inasmuch as the possession which is claimed to be adverse
is stated to have commenced in 1920, and it is well settled that such
possession cannot affect the right of a prior mortgagee to bring the properties
to sale, and adverse possession against the purchaser under that sale cannot
commence prior to the date of that sale, and the present suit was instituted on
8-11945 within 12 years of the sale, which took place in 1936.
The appeal fails, and is dismissed with
costs.
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