1 R IN THE HIGH COURT OF KARNATAKA KALABURAGI BENCH DATED THIS THE04H DAY OF AUGUST, 2022 BEFORE THE HON’BLE MR.JUSTICE M.G.S.KAMAL RSA No.1978/2007 (DEC/INJ) BETWEEN: SRI. VEERANNA S/O SANGAPPA BIRADAR, AGED ABOUT37YEARS, OCC: AGRICULTURAL, R/O DOMANAL, TALUK AND DISTRICT BAGALKOT. PIN-587102. ... APPELLANT (BY SRI D.P.AMBEKAR, ADVOCATE) AND: SRI. BASANAGOUDA, S/O BASAPPA METI, AGED ABOUT49YEARS, OCC: AGRICULTURIST, R/O HULLUR VILLAGE, TALUK MUDDEBIHAL, DISTRICT BIJAPUR-586112. ... RESPONDENT (BY SRI MANVENDRA REDDY, ADVOCATE) 2 THIS RSA IS FILED UNDER SECTION100OF THE CODE OF CIVIL PROCEDURE, PRAYING TO SET ASIDE THE
JUDGMENTAND DECREE DATED1004.2007 PASSED BY THE PRINCIPAL DISTRICT JUDGE, BIJAPUR IN R.A.NO.57/2005 CONFIRMING THE
JUDGMENTAND DECREE DATED1002.2005 PASSED BY THE CIVIL JUDGE (SR.DN.), MUDDEBIHAL IN O.S.NO.219/2001 BY ALLOWING THIS APPEAL, CONSEQUENTLY DECREEING THE SUIT OF THE PLAINTIFF WITH COSTS OF THE PROCEEDINGS. THIS APPEAL HAVING BEEN HEARD AND RESERVED, COMING ON FOR ‘PRONOUNCEMENT OF
JUDGMENT’, THIS DAY, THE COURT DELIVERED THE FOLLOWING:
JUDGMENTPresent Regular Second Appeal is filed by the appellant/plaintiff against the Judgment and Decree dated 18.04.2007 passed by the Principal District Judge, Bijapur (hereinafter referred to as 'the First Appellate Court') in R.A.No.57/2005, by which the First Appellate Court while dismissing the appeal confirmed the Judgment and Decree dated 10.02.2005 passed by the Civil Judge, Senior Division at Muddebihal (hereinafter referred to as 'the Trial Court') by which suit of the appellant/plaintiff in O.S.No.219/2001 (old No.186/1996) for relief of declaration of title and injunction was dismissed. 3
2. Parties are referred to by their original rank before the Trial Court.
3. The suit properties are the immovable properties bearing: i) Survey No.133/1 measuring 2 acres 32 guntas; ii) Survey No.133/2 measuring 4 acres; iii) Survey No.134 measuring 6 acres 33 guntas; all situated in Hullur village, Muddebihal taluk.
4. Brief facts of the case of the plaintiff are that; defendant is the uncle of the plaintiff, as the mother of the plaintiff is elder sister of the wife of defendant. That the suit properties originally belonged to the defendant. That the plaintiff purchased Item No.1 and 3 of the suit properties for a valuable consideration of Rs.38,000/- under a registered deed of sale dated 24.10.1988. That Item No.2 of the suit properties had been earlier sold by the defendant to one Veerasangayya Kuchbal, S/o. Mahadevaiah Kuchbal of Hullur village and that the plaintiff purchased the same from the said Veerasangayya Kuchbal 4 under a registered deed of sale dated 25.10.1988 for a sale consideration of Rs.15,500/-. That the plaintiff had entrusted the suit properties to the defendant to look after and cultivate the same as the plaintiff was residing in Domnal village. That in the year 1994, defendant in collusion with the revenue officials got his name entered in the revenue records in respect of the suit properties vide Diary No.3723 and denied his title. Being aggrieved by the same, plaintiff filed the suit seeking declaration of his ownership and for permanent injunction restraining the defendant from interfering with the peaceful possession and enjoyment of the plaintiff over the suit properties and also for possession, if the court finds him not to be in possession of the suit properties.
5. Defendant in his written statement admitted that the suit properties earlier belonged to him but denied that the ownership and possession of the plaintiff over the same. It is specifically contended by the defendant that he had borrowed an amount of Rs.40,000/- from 5 Veerasangayya Kuchbal of Hullur village by executing a deed of sale in respect of Item No.2 of the suit properties as a security against the said loan. That the plaintiff and his father had represented that they would repay the loan of the defendant on his behalf to Veerasangayya in lieu of he executing a nominal deed of sale in respect of suit properties in their favour with an assurance of reconveying the same on he repaying their dues. Accordingly, the defendant executed deed of sale dated 24.10.1988 in favour of plaintiff in respect of item Nos.1 and 2 of suit properties and the plaintiff paid Rs.40,000/- to Veerasangayya Kuchbal on behalf of the defendant and got the Item No.2 of the suit schedule property conveyed in his name from Veerasangayya Kuchbal under deed of sale dated 25.10.1988. That the possession of suit properties was not delivered and plaintiff has never been in possession of the suit properties. That in the year 1993 the defendant had repaid the loan amount to the plaintiff. Since reconveyance of the property would involve huge expenses, in order to save the same the plaintiff released 6 the suit properties in favour of the defendant on the basis of a Wardi to the Village Accountant, Hullur and pursuant to which, Diary No.3723 was effected in the name of the defendant in respect of the suit properties. That all these transactions were made in good faith and in consideration of relationship between the parties. That the plaintiff has filed the present suit with malafide intention of knocking of his properties. Hence, sought for dismissal of the suit.
6. The Trial Court based on the pleadings, framed the following issues:
1. Whether the plaintiff proves that the suit properties bearing R.S.No.133/1 and 134 have been purchased by the plaintiff for consideration of Rs.38,000/- on 24.10.1988?.
2. Whether the plaintiff proves that he has purchased the suit property R.S.No.133/2 for Rs.15,500/- from Veerasangayya Mahadevayya Kuchbal on 25.10.1988?.
3. Whether the plaintiff proves that he was the lawful owner in possession of the suit property as on the date of the suit?.
4. Whether the defendant proves that the sale-deed in respect of R.S.No.133/1 and 134 is not legal and valid and it has been executed for nominal sake?. 7 5. Whether the plaintiff proves that he is entitled for relief of declaration and injunction as prayed for?.
6. What order or decree?.
7. The plaintiff examined himself as P.W.1 and his father examined as P.W.2 and exhibited eight documents marked Exs.P1 to P8. Defendant examined himself as D.W.1 and also examined three other witnesses including the aforesaid Veerasangayya Kuchbal as D.Ws.2, 3 and 4 and exhibited 12 documents marked Exs.D1 to D12.
8. The Trial Court, by its Judgment and Decree dated 10.02.2005, dismissed the suit of the plaintiff by holding that the deeds of sale dated 24.10.1988-Ex.P1 and 25.10.1988-Ex.P2 executed in favour of the plaintiff were intended to be a collateral security towards repayment of the loan paid by the plaintiff to Veerasangayya Kuchbal on behalf of and at the instance of defendant.
9. Being aggrieved by the said Judgment and Decree, plaintiff filed regular appeal in R.A.No.57/2005 before the First Appellate Court. The First Appellate Court 8 based on the grounds urged by the plaintiff framed the following points for its consideration: i) Whether the sale of land is void?. ii) Whether there was out and out sale of suit land in favour of the plaintiff and that it was not a nominal?. iii) What order?.
10. The First Appellate Court, by the impugned Judgment and Order, dismissed the appeal by the plaintiff confirming the Judgment and Decree passed by the Trial Court. Aggrieved by the same, the plaintiff is before this Court in this second appeal.
11. This Court by order dated 22.03.2011, while admitting the aforesaid appeal framed the following substantial questions of law for its consideration. i. Whether the Trial Court as well as the First Appellate Court were not justified in holding that the plaintiff who purchased the suit lands, under the sale deeds Ex.P.1 executed by the defendant on dated 24.10.1988 and under Ex.P.2 executed by DW.4 Veerasangayya on dated 25.10.1988 was minor as on the said dates and therefore both the said sale transactions are void?. 9 ii. Whether both the Courts were not justified in placing reliance on Ex.D12, the Transfer Certificate, issued by the school concerned in recording their findings that the plaintiff was minor, as on the relevant dates of the sale deeds at Exs.P.1 and P.2?. iii. Whether both the Courts were not justified in placing reliance on the oral evidence of DW.4 in recording their findings that the transactions between the plaintiff on the one side and the defendant and DW.4 Veeransangayya on the other, under Exs.P.1 and P.2 sale deeds were loan transactions but not the sale transactions in respect of the suit properties?.
12. Sri.D.P.Ambekar, learned counsel for the appellant reiterating the grounds urged in the memorandum of appeal submitted that: i) There is no specific plea in the written statement with regard to the appellant being minor at the time of execution of deeds of sale, thereby, rendering the deeds of sale void. ii) That even otherwise, a deed of sale in favour of minor would not offend any provision of law rendering the same void. The First Appellate Court and the Trial Court erred in holding to the contrary. iii) That the pleading and the evidence of the defendant are mutually contradictory and cannot be accepted. 10 iv) That the claim of the defendant with regard to sale of suit properties as security for the loan paid by the plaintiff on behalf of the defendant to Veerasangayya Kuchbal cannot be accepted as the same is against the requirements of Section 58(c) of the Transfer of Property Act. He relied upon following Judgments in support of his case: i) Munni Kunwar Vs Madan Gopal (1916) ILR39All 62; ii) A.T.Raghava Chariar Vs O.A. Srinivasa Raghava Chariar (1916) 31 MLJ575 iii) K.Kamalam vs K.Balakrishnan & Ors. (2004) 1 SCC581 iv) Ouseph Varghese vs Joseph Aley & Ors.1969 (2) SCC539 v) K.Simrathmull vs S.Nanjalingiah Gowder 1963 AIR1182 1962 SCR Supo.(3) 476; vi) Sarvamangalamma vs Amaregouda 2014 SCC OnLine Kar 1213 13. On the other hand, Sri.Manvendra Reddy, learned counsel for the defendant justifying the Judgments and Decrees order passed by the First Appellate Court and the Trial Court submitted that: i) Since the plaintiff was a minor at the time of execution of deeds of sale, the sale transaction in his favour is void ab initio and not binding on the defendant. ii) That the plaintiff has failed to satisfy the enforceability of the contract, his competency to enter into contract as 11 contemplated under Sections 2(h), 10 and 11 of Indian Contract Act. iii)That there is no distinction provided under Section 11 of the Contract Act with regard to purchaser being minor and competent to enter into contract. iv)That there was misrepresentation by the plaintiff in disclosing his age at the time of execution of deeds of sale which amounts to fraud vitiating the entire transaction. As such, the deeds of sale are void from the inception requiring no action on the part of the defendant to seek any declaration as the void contract cannot be enforced. v) That the sale transaction was nominal only as security for the repayment of loan by the plaintiff to Veerasangayya Kuchbal on behalf of the defendant which fact has been proved by the defendant by leading sufficient evidence. vi) That D.W.4, the original lender has categorically deposed about the entire transaction being loan transaction and execution of deeds of sale being nominal ones, thereby establishing the case of the defendant. 12 vii) That the possession of the suit properties has never been handed over to the plaintiff and the same has always remained with the defendant.
14. He relied upon the following decisions in support of his case; i) Dyaviah and Anr Vs. Shivamma and Anr. AIR1959Mysore 188 (V46C78 ii) Pramila Bali Das And Ors. Vs Jogesher Mandal.46 Ind Cas 670 iii) T.R.Appasami Ayyangar Vs Narayanaswami Iyer And Ors. 129 Ind Cas 51 iv) Lakhwinder Singh Vs Paramjit Kaur AIR2004P&H6 v) Ram Chandra Singh Vs Savitri Devi and Ors. 2004 SAR (Civil) 1 vi) Gokeda Lateharao Vs Viswanadham Bhimayya. AIR1956AP182vii) Punjab and Haryana 164 M/s. Pearls Dream Palaces Construction (P) Ltd., Jaipur vs Vikas. AIR2019viii) Bhim Mandal vs Magaram Corain and Ors. AIR1961Patna 21 (V48C6 ix) Sri Aralappa Vs Sri Jagannath and Ors. 2007(1) KCCR235x) Babla Alias Dinesh Vs State of Uttarakhand. (2012) 8 SCC800xi) Madappa Vs Sonavva and Ors. ILR2001KAR429515. Heard the learned counsel for the parties. Perused the records. The undisputed facts of the case are 13 that the defendant was the absolute owner of suit properties. That the plaintiff has repaid the loan of the defendant to Veerasangayya. That defendant had earlier executed a deed of sale in respect of Item No.2 of the suit properties in favour of one Veerasangayya. That defendant along with his wife executed a deed of sale dated 24.10.1988-Ex.P1 in favour of the plaintiff in respect of Item Nos.1 and 3 of the suit properties. That the said Veerasangayya had executed a deed of sale dated 25.10.1988-Ex.P2 in respect of Item No.2 of the suit properties in favour of plaintiff.
16. However, according to the defendant the deeds of sale at Exs.P1 and P2 were nominal in nature executed as a security against the repayment of loan made by the plaintiff to Veerasangayya on his behalf. That the defendant had repaid the entire loan amount to the plaintiff in the year 1993 pursuant to which plaintiff had given up his rights in favour of the defendant in respect of the suit properties based on which a Wardi was filed before 14 the Village Accountant and necessary entries were made in the revenue records vide M.E.No.3723 as per Ex.P3. It is the further contention of the defendant during the Trial that the deeds of sale at Exs.P1 and P2 are void as the plaintiff was a minor. Regarding Substantial Questions of Law Nos.1 and 2:
17. Before adverting to these substantial questions law it is appropriate to refer to relevant provisions of law and the settled legal principles with regard to sale/conveyance of property in favour of a minor. Section 7 of the Transfer of Property Act, provides as under: S.7: Persons competent to transfer. – Every person competent to contract and entitled to transfer property, or authorised to dispose of transferable property not his own, is competent to transfer such property either wholly or in part, and either absolutely or conditionally, in the circumstances, to the extent and in the manner, allowed and prescribed by any law for the time being in force. It is also relevant to refer to Section 11 of the Indian Contract Act which is as under:
15. S.11Who are competent to contract. – Every person is competent to contract who is of the age of majority according to the law to which he is subject, and who is of sound mind and is not disqualified from contracting by any law to which he is subject.
18. Bare perusal of the aforesaid provisions of Section 7 of the Transfer of Property Act makes it clear that it refers only to the competency of a transferor of a property to enter into contract, and not with regard to competency of a transferee. Perusal of the Section 11 of the Contract Act refers to competency of persons to enter into a contract and there is no distinction of any nature.
19. A Division Bench of Allahabad High Court in its Judgment rendered in the case of MUNNI KUNWAR supra, in identical circumstances wherein a suit for possession was filed by the plaintiff therein in whose favour a deed of sale was executed by the defendant, and in defence, it was contended that the sale was a fictitious as at the date of deed of transfer, plaintiff was under- aged, the court referring to the provisions of the Transfer of Property Act has held as under:
16. "Section 5 of Transfer of Property Act defines "Transfer of Property" as an Act by which a living person conveys property to one or more other living persons or to himself and one or more living persons. Section 6 Clause (h), of the same Act sets forth the Clause of transfer of property which cannot be made. It does not state that a transfer cannot be made to a minor. Section 7 provides that every person competent to contract and entitled to transfer the property is competent to transfer such property. Nowhere in the Act it is provided that a minor is incapable of being a transferee of property, and as a matter of practice, we are well aware that the transfer of immovable property are every day made to minors. Section 127 by necessary implication shows that a person who is not competent to contract may be the donee of immovable property, and that even in the case of property burdened with an obligation if after he has become competent to contract and aware of obligation, he retains the property, he becomes bound.
20. The High Court of Madras in the case of A.T.RAGHAVA CHARIAR supra dealing with the case which involved execution of mortgage deed in favour of a minor who had advanced the whole mortgage money, at Paragraphs 9 and 10 of the said Judgment has held as under:
"9. As for the infant's legal position with reference to transfers of property, he is undoubtedly capable of holding property and can acquire property not only by 17 inheritance or bequest but also by gift. Section 7 of the Transfer of Property Act lays down generally that a person competent to contract may make a transfer but that Act nowhere says that a person cannot be a transferee of property unless he is competent to contract. It has however been held in Navakoti Narayana Chetty v. Logalinga Chetty 5 Bing N.C.76 by Bension and Krishnaswami Aiyer. JJ.
That a transfer by way of sale in favour of a minor is void while the Allahabad High Court holds a different view (see Munni Kunwar v. Madan Gopal (1894) L.R.3 Ch.589). Mr. Justice Krishnaswami Aiyar who discussed the matter at some length in the Madras Case seemed to think that the proposition laid down by him logically followed from the ruling of the Privy Council in Mohori Bibee v. Dharmodas Ghose. 1882) L.R. 19 ch.D.
603. The gist of his reasoning seems to be that as a contract of a minor has been held to be void and not voidable and as a sale presupposes a contract on the part of the vendor and the vendee, the sale to a minor must be void. But this really ignores the substantial distinction between a contract for a sale and a sale, viz., that a sale effects a transfer of the property, while a mere contract for a sale does not. A transfer need not be founded on a contract at all. What, therefore, we have primarily to look to in cases like this is the competence of the transferor to make the transfer. Where there has been a completed sale in favour of an infant the only question that might arise on his side is, whether not being competent to transfer, he would not be entitled to recover the money which he has paid to the vendor as consideration for the sale. I think he would be so entitled, though the Court of Equity will help him only on the condition that he restores the property to the vendor. The result no doubt would be that if an infant chooses to avoid a sale in his favour the transaction will be treated as void ab initio. This seems to be 18 strictly deducible from the combined provisions of the Transfer of Property Act and the Contract Act, bearing on the subject. It is also in accordance with the English law on the point as summarised in Halsbury's Laws of England (Volume XVII, pages 75 and 76). It is stated there "the acquisition of property being generally beneficial; an infant can take property, both real and personal in any manner whatever, either by descent, intestacy or will, or by purchase or gift or other assurance inter vivos except where it is necessarily prejudicial to do so (paragraph 200). A purchase of property, or the acceptance of a gift of property, by an infant is voidable by him; … But in the meantime the property is vested in him.
10. If he avoids it after attaining full age the purchase or gift is void ab initio and the property revests in the vendor or donor (para. 201)". The disability of an infant to make a contract or to transfer property is intended for his protection and there is nothing in reason why the other party to the bargain who was fully competent in these respects should be permitted to repudiate it. If the law were otherwise, a very numerous class of infants engaged in profitable employments will be seriously affected and an element of uncertainty would be introduced into many dealings hitherto regarded as unimpeachable. There are cases, however, in which the question of mutuality arises and these stand on a different footing. For instance, if an infant seeks to enforce a contract for sale of immoveable property, the Court of Equity will refuse to grant specific performance as it could not enforce any engagement entered into by the minor and there would thus be a want of mutuality (Mir Sarwarjan v. Fakhruddin Mahomed Chow dhury (1881) 18 Ch.D. 109 at 121). I am therefore of opinion that the decision in Navakoti Narayana Chetty v. Logalinga Chetty L.R.. (1903) A.C. 6 is 19 wrong in so far it lays down that a purchase by a minor is void and can be set aside at the instance of the vendor or objected to by third parties.
21. Apex Court in the case of K.BALAKRISHNA supra, placing reliance on the Judgment of Allahabad High Court in the case of MUNNI KUNWAR supra dealing with conveyance of property by way of gift in favour of a minor at Paragraphs 12, 13, 14, 20 and 21 has held as under:
"12. The second question which has been posed by the High Court and answered against the donor is regarding acceptance of the gift and its revocability.
13. A minor in law suffers from certain specified disabilities. A minor is not competent to enter into a contract. Section 11 of the Contract Act states :-
"11. Who are competent to contract.-. Every person is competent to contract who is of the age of majority according to the law to which he is subject, and who is of sound mind and is not disqualified from contracting by any law to which he is subject.
14. A minor suffers disability from entering into a contract but he is thereby not incapable of receiving property. The Transfer of Property Act does not prohibit transfer of property to a minor.
20. Section 127 clearly recognises the competence of a minor to accept the gift. The 20 provision of law is clear and precedents clarify the position. See the decisions of Judicial Commissioner in the case of Firm of Ganeshdas Bhiwaraj vs.Suryabhan [1917 XIII Nagpur Law Reports 18].; Munni Kunwar vs. Madan Gopal [1916 (XXXVIII) ILR Allahabad 62 at 69].; and Firm of Geneshdas Bhiwaraj vs. Suryabhan [1917 Vol. 39 Indian Cases 46]..
21. The position in law, thus, under the Transfer of Property Act read with the Indian Contract Act is that "the acquisition of property being generally beneficial, a child can take property in any manner whatsoever either under intestacy or by Will or by purchase or gift or other assurance inter vivos, except where it is clearly to his prejudice to do so. A gift inter- vivos to a child cannot be revoked. There is a presumption in favour of the validity of a gift of a parent or a grandparent to a child, if it is complete [See Halsbury's Laws of England Vol. 5(2) 4th Edn. Paragraphs 642 & 647].. When a gift is made to a child, generally there is presumption of its acceptance because express acceptance in his case is not possible and only an implied acceptance can be excepted.
22. From the aforesaid provisions of law and the legal principles, it is clear that there is no bar, prohibition or impediment in property being acquired by a minor.
23. Learned counsel for the plaintiff submitted that there is no specific plea in the written statement with regard to the deeds of sale being void on account of plaintiff being minor, the defendants cannot be permitted 21 to lead evidence regarding the minority of the plaintiff and thereby, avoid the deeds of sale. It is a trite law that any amount of evidence without pleading cannot be considered. Nonetheless, the issue being one with regard to legality of the transaction the same requires to be considered. As noted above, defendant has not disputed execution of deeds of sale in favour of the plaintiffs. The execution of deeds of sale do not offend the aforesaid legal principles.
24. Learned counsel for the defendant has placed reliance on decisions of Apex Court and also various High Courts in support of his contention of minor being incompetent to enter into any contract in view of Section 11 of the Contract Act. He also emphatically submitted that any sale transaction entered into by a minor is void and does not create any right. Referring to Section 65 of the Contract Act, it is submitted that since the plaintiff had misrepresented his age, provisions of Section 65 needs to be invoked to grant relief in favour of the defendant. He 22 also submitted that the contract can only be between competent parties and admittedly, plaintiff being a minor cannot derive the benefit of a void transaction. In other words, there was no sale in the eye of law. Therefore, there was no need for the defendant to have sought for any relief.
25. A perusal of the aforesaid Judgments relied upon by the learned counsel for the defendant reveal that the challenge to the transactions subject matter of the said Judgments are on the premise that the transferors therein were minors and the transactions were entered on the basis of fraud and misrepresentations. It is under such circumstances referring to Sections 11 and 65 of the Indian Contract Act, 1872, the Courts in those Judgments have held the transactions to be void, invalid and unenforceable. The fact situation in the said cases is completely different and distinct from that of the one involved in the present case. 23
26. In the instant case, as already noted above plaintiff is the purchaser/transferee. He is the beneficiary under the deeds of sale. The defendant has consciously executed deeds of sale in favour of the plaintiff, albeit contending the same to be nominal deeds of sale. Thus, there is no dispute or denial of the execution of deeds of sale. There is also no denial of plaintiff paying the money, though the defendant contend the same to be towards repayment of his loan to Veerasangayya. In this fact situation, the reliance placed on by the learned counsel on the aforesaid Judgments is of no avail.
27. From the aforesaid discussion and the proposition of law laid down in the Judgments referred to above, it becomes clear that the policy behind prescribing age of majority under Section 11 of the Indian Contract Act is to safeguard/protect the rights of a minor. While there cannot be any impediment in a minor being beneficiary/recipient under a contract. Transaction/ contracts involving reciprocal promises require both the 24 parties or transferor and transferee to be competent to a contract. A minor cannot be subjected to any obligation or burden of performance of any reciprocal promises. It is in this inherent requirement of protecting the interest of minor, age of majority being component of competency to enter into contract is mandated under Section 11 of the Indian Contract Act.
28. Thus, in the instant case, the execution of deeds of sale at Ex.P1 and Ex.P2 by defendant along with his wife and Veerasangayya respectively conveying the suit properties in favour of the plaintiff who was apparently a minor at the time of transaction cannot be faulted with. They are just, valid and subsisting having created ownership and title in favour of the plaintiff in respect of suit properties.
29. It is equally necessary note that the defendant even according to his pleading in the written statement was in need of funds to repay his loan to Veerasangayya in whose favour he had already executed a deed of sale. The 25 said loan was admittedly paid by the plaintiff on behalf of the defendant to said Veerasangayya. The defendant who was "competent to transfer" having derived the benefit of the transaction cannot now seek to avoid the effect of the same by pleading plaintiff being minor rendering the transaction void.
30. Though there is no specific pleading in the written statement by the defendant with regard to transaction being void on account of minority of the plaintiff, in the evidence the defendant has raised this issue and has relied upon Ex.D12-transfer certificate issued by the school concerned. The plaintiff in the absence a specific plea had no opportunity to rebut the said contention raised by the defendant. Nevertheless in view of answer to the substantial question of law No.1 being sale in favour of a minor is valid, this requirement pales into insignificance. In that view of the matter, the substantial questions of law Nos.1 and 2 are answered accordingly. 26 Regarding Substantial Question of Law No.3:
31. It is the specific case of the defendant that the deeds of sale executed in favour of the plaintiff are nominal only to secure the loan paid by the plaintiff. That the defendant has repaid the entire loan amount to the plaintiff in the year 1993 and since the reconveyance of the property in his name would involve huge expenditure and in order to save the same, the suit properties were reconveyed in his favour by the plaintiff merely by reporting a Wardi.
32. The Trial Court and the First Appellate Court accepting the aforesaid plea of the defendant have concluded that the transaction was not a sale but a mortgage. The Trial Court and the First Appellate Court to arrive at such conclusion have relied upon the evidence of defendant-D.W.1 and Veerasangayya D.W.4 who had originally lent loan to the defendant-D.W.1. The said witness has in his deposition stated about the transaction 27 being a loan transaction and the deed of sale in favour of plaintiff was a nominal one.
33. Both the Trial Court and the First Appellate Courts though have concluded that the transaction to be a mortgage but have not specified the type of mortgage purportedly created by the defendant in the instant case. In this regard, it is necessary to refer to the definition of mortgage and types of mortgages contemplated under the Transfer of Property Act which are extracted hereunder for immediate reference. “58 Mortgage”, “mortgagor”, “mortgagee”, “mortgage-money” and “mortgage-deed” defined.— (a) A mortgage is the transfer of an interest in specific immoveable property for the purpose of securing the payment of money advanced or to be advanced by way of loan, an existing or future debt, or the performance of an engagement which may give rise to a pecuniary liability. The transferor is called a mortgagor, the transferee a mortgagee; the principal money and interest of which payment is secured for the time being are called the mortgage-money, and the instrument (if any) by which the transfer is effected is called a mortgage-deed. (b) Simple mortgage.—Where, without delivering possession of the mortgaged property, the mortgagor binds himself personally to pay the mortgage-money, and agrees, expressly or impliedly, that, in the event of his failing to pay according to his contract, the 28 mortgagee shall have a right to cause the mortgaged property to be sold and the proceeds of sale to be applied, so far as may be necessary, in payment of the mortgage-money, the transaction is called a simple mortgage and the mortgagee a simple mortgagee. (c) Mortgage by conditional sale.—Where the mortgagor ostensibly sells the mortgaged property— on condition that on default of payment of the mortgage- money on a certain date the sale shall become absolute, or on condition that on such payment being made the sale shall become void, or on condition that on such payment being made the buyer shall transfer the property to the seller, the transaction is called a mortgage by conditional sale and the mortgagee a mortgagee by conditional sale:
1. [Provided that no such transaction shall be deemed to be a mortgage, unless the condition is embodied in the document which effects or purports to effect the sale.]. (d) Usufructuary mortgage.—Where the mortgagor delivers possession 2 [or expressly or by implication binds himself to deliver possession]. of the mortgaged property to the mortgagee, and authorises him to retain such possession until payment of the mortgage-money, and to receive the rents and profits accruing from the property 3[or any part of such rents and profits and to appropriate the same]. in lieu of interest, or in payment of the mortgage-money, or partly in lieu of interest 4[or]. partly in payment of the mortgage-money, the transaction is called an usufructuary mortgage and the mortgagee an usufructuary mortgagee. (e) English mortgage.—Where the mortgagor binds himself to repay the mortgage-money on a certain date, and transfers the mortgaged property absolutely to the mortgagee, but subject to a proviso that he will re- transfer it to the mortgagor upon payment of the mortgage-money as agreed, the transaction is called an English mortgage. [(f) Mortgage by deposit of title-deeds.—Where a person in any of the following towns, namely, the towns of Calcutta, Madras 2[and Bombay]., 3*** and in any other town which the 4[State 29 Government concerned]. may, by notification in the Official Gazette, specify in this behalf, delivers to a creditor or his agent documents of title to immoveable property, with intent to create a security thereon, the transaction is called a mortgage by deposit of title- deeds. (g) Anomalous mortgage.—A mortgage which is not a simple mortgage, a mortgage by conditional sale, an usufructuary mortgage, an English mortgage or a mortgage by deposit of title-deeds within the meaning of this section is called an anomalous mortgage.].
34. Perusal of aforesaid provisions of the Transfer of Property Act reveal that the defendant's case would not fall in any of the types of the mortgages referred to hereinabove. Though it is contended by the defendant that the plaintiff and his father had assured to reconvey the suit properties on repayment of loan by the defendant, admittedly no written agreement has been entered into in this regard. Assuming that there was any such agreement between the defendant and the plaintiff the same stands excluded in terms of Proviso to Section 58(c) of the Transfer of Property Act.
35. Proviso to Section 58(c) was added by Section 19 of the Transfer of Property (Amendment) Act, 1929. This Proviso was introduced in this Clause only to set at 30 rest the controversy about the nature of document, whether the transaction would be a sale or a mortgage (Mulla Transfer of Property Act, 13th Edition Page 514). It has been specifically provided by the Amendment that the document would not be treated as a mortgage, unless the condition of repurchase was contained in the same document. Vidya Shankar vs. Manikrao - 1999(3) SCC573 P.L.BAPU SWAMY vs. N.PATTAYGOUNDER - AIR1966SC902and RAJ KISHORE vs. PREM SINGH - AIR2011SC382 36. The Apex Court in its judgment in the case of Mushir Mohammed Khan Vs. Sajeda Banu and Others (2000) 3 SCC536 dealing with a case involving execution of deed of sale by the plaintiff therein favour of the defendant and later defendant therein executing an agreement in favour of the plaintiff agreeing to re-convey the property and plaintiff executing a rent note in favour of the defendant agreeing to pay rent till re-conveyance at paragraph No.14 held that; 31 "the two documents read together would not constitute a "mortgage" as the condition for purchase is not contained in the same document by which the property was sold. The Proviso to Clause (C) of Section 58 would operate in the instant case also and the transaction between the parties cannot be held to be a mortgage by a conditional sale". It further at paragraph No.16 has held that; "if the documents cannot be treated as creating a mortgage on account of prohibition contained in the proviso to clause (C) of Section 58, it is difficult to accept that these documents would create a mortgage of another kind. Though in usufructuary mortgage, the possession has necessarily to be delivered to the mortgagee, an agreement for reconveyance is not obtained from him. An agreement of reconveyance does not normally constitute part of transaction by which usufructuary mortgage is created. Where parties executed three documents contemporaneously, all the three documents have to be taken into consideration to find out the nature of transaction".
37. From the aforesaid provisions of law and the Judgment of the Apex Court, it is clear that in order to contend that the transaction was a mortgage and not out and out sale, it requires compliance with the provisions of law set forth hereinabove and in the absence of the same, such contention cannot be countenanced. 32
38. The Trial Court and the First Appellate Court have relied upon the judgment of a Coordinate bench of this Court in the case of Madappa Vs. Sonavva and Others, reported in ILR2001KAR4295wherein this Court dealing with the case involving a mortgage by conditional sale had held that; "even though the recitals of the sale deed indicate that it is an out and out sale, still the Court should endeavor to find out from the facts and circumstances of the case as to whether the sale deed was executed as a collateral security and was not intended to a sale". The Court further held that; "once the First Appellate Court records a finding that it was executed as collateral security such a finding cannot be reversed in second appeal being a finding of fact and the substantial question of law framed at the time of admission does not arise at all".
39. Though the Trial Court and the First Appellate Court relied upon the judgment of this Court in Madappa (supra), it is to be noted the facts involved in the aforesaid case are that there was simultaneous execution of agreement deed agreeing to retransfer the suit property in 33 the name of defendant therein on repayment of loan amount. That apart there was also a proceeding before the Sub-Divisional Magistrate under the Karnataka Debt Relief Act, 1976 wherein on enquiry of the mortgage transaction, the defendant therein was absolved from payment of principle amount. In the instant case, fact situation being completely different and distinct the Trial Court and the First Appellate Court have not adverted to the same. There is a complete lack of pleading and evidence by the defendant with regard to the date of loan transaction, the amount of loan transaction, the witnesses to the loan transaction, the date of repayment of the loan amount, the rate of interest if any paid by the defendant and the mode of payment. In the absence of a specific plea and material evidence in this regard, the Trial Court and the First Appellate Court erred in accepting the said plea of the defendant of he having repaid the loan to the plaintiff in the year 1993. Plaintiff and his father claims to have paid Rs.1,30,000/- as consideration, while defendant contend that the plaintiff paid only Rs.40,000/- on his 34 behalf to DW.4. But Exs.P1 and P2 reflect Rs.38,000/- and 15,500/- as sale consideration respectively.
40. Another aspect of the matter is that defendant has claimed that in order to save the cost and expenses, he obtained the re-conveyance only on the basis of a report/Wardi to the Revenue Officer. In this regard, perusal of Ex.P3 and mutation entry at No.3723 refers to a purported partition having taken place on 31.12.1993 between the plaintiff and the defendant based on which name of the defendant has been entered into in the revenue records in respect of the suit properties. The plaintiff has seriously disputed the same. At the outset, it is to be noticed that there cannot be a partition between the plaintiff and the defendant in respect of the suit properties as sought to be contended by the defendant. Secondly, re-conveyance of immovable property can be effected only by a document to be registered under the provisions of the Indian Registration Act. In the absence of 35 such a document, any oral evidence to the contrary cannot be accepted.
41. As regards the contention of the defendant of he not delivering the possession of the property to the plaintiff, it is necessary to refer to contents of deeds of sale at Exs.P1 and P2 which in categoric terms provide for delivery of physical possession of the suit properties to the plaintiff. Plaintiff himself has pleaded that since he is residing in Domnal village he had asked the defendant to look after the same. Further admittedly name of the defendant was re-entered in the revenue records in the year 1994 pursuant to Wardi at Ex.P3, which postulates existence of name of the plaintiff in the revenue records prior to Ex.P3. According to plaintiff soon after learning about the illegal entry he initiated the proceeding before the revenue authorities seeking its cancellation. It is also relevant to note that any unlawful entry into the revenue records would not create substantive rights in favour of the party claiming such rights. Therefore, the contention of the 36 defendant of non-delivery of possession of the suit properties to the plaintiff and his further claim regarding his name being entered into in the revenue records based on the Wardi cannot be countenanced. The plaintiff is thus, required to be held to be in possession of the suit properties.
42. As already noted execution and registration of deeds of sale at Exs.P1 and P2 have not been disputed or denied. Validity and subsistence of Exs.P1 and P2 cannot be ignored in the absence of any decree to the contrary by a competent court of law. There is no ambiguity in the contents of Exs.P1 and P2 with regard to same being simple out and out deeds of sale. There is no reference in the said documents even to remotely suggest anything with regard to the loan transaction between the plaintiff and the defendant and plaintiff agreeing to reconvey the property to the defendant. The language employed in EXs.P1 and P2 is plain and unambiguous. No other 37 intentions are emanating from the contents thereof warranting any extrinsic evidence.
43. In terms of Section 92 of the Indian Evidence Act, no oral evidence is permissible for the purpose of contradicting, varying, adding to or subtracting from terms of the agreement. The defendant has not made out any grounds to bring his case within the Proviso 1 to 6 of Section 92.
44. The learned counsel for the respondent strenuously submitted that the transaction was done based on good faith and consideration of proximate relationship between the parties and the value of the suit properties even as on the date of execution Exs.P1 and P2 was far higher than the payment made, plaintiff ought not to be allowed to use the same as means for undue enrichment. Though the said submission appears to be plausible, but, the defendant alone is responsible for entering into such a transaction without securing his interest in the manner known to law purportedly to save the expenses involved in 38 obtaining registered deed of re-conveyance. The defendant is not only expected to know the law but also expected to be vigilant about exercise of his rights. Defendant has not initiated any independent proceedings seeking any appropriate relief as per law.
45. In view of the aforesaid discussion, this Court is of the considered view that the Trial Court and the First Appellate Court are not justified in concluding that Exs.P1 and P2 are not the sale transaction but were loan transactions. Substantial question of law No.3 is answered accordingly.
46. In the result, the following:
ORDERi) The appeal in RSA.No.1978/2007 is allowed. ii) Judgment and Decree dated 18.04.2007 passed by the Principal District Judge, Bijapur in R.A.No.57/2005 and the Judgment and Decree dated 10.02.2005 passed by the Civil Judge, Senior Division at Muddebihal in O.S.No.219/2001 (old No.186/1996) are set aside. 39 iii) Consequently, plaintiff is declared to be the absolute owner in possession of the suit properties. iv) The defendant, his agents or any person claiming through or under him are restrained by way of permanent injunction from interfering with the peaceful possession and enjoyment of the plaintiff over the suit properties. v) In the circumstances, no order as to costs. Sd/- JUDGE Bnv