Judgment:
1. These two appeals and cross-objections arise out of a common judgment in OS No.8 of 1995 and OS No.2 of 1995 dated 15-4-1996 on the file of the Subordinate Judge's Court at Avanigadda. The appellant in AS No.2901 of 1996 is the defendant No.2 in OS No.8 of 1995 and the respondent No.1 (plaintiff in OS No.8 of 1995) filed cross objections. The appellant in AS No.30 of .1997 is the plaintiff in OS No.2 of 1995, who was defendant No.2 in OS No.8 of 1995. The defendant No.4 in OS No.2 of 1995 is the defendant No.1 in OS No.8 of 1995. Defendants 1 to 3 in OS No.2 of 1995 are not parties to OS No.8 of 1995.
2. For the sake of convenience, the parties will be referred to as they are arrayed in OS No.2 of 1995.
3. The suit OS No.2 of 1995 is one for specific performance of an agreement of sale dated 20-3-1979 executed bydefendants 1 and 2 executed in favour of Defendant No.4. The plaintiff claimed that defendants 1 and 2, who are husband and wife, are the owners of the suit schedule property. Defendant No.3 is their son. Defendants 1 and 2 wanted to sell and the plaintiff intended to purchase the property (since he has adjacent land) in the name of his wife. However, since one T. Rama Rao, a sister's son of the defendant No.1 was cultivating the said land and another Ac.0-50 cents of the adjoining land as tenant of defendant Nos.1 and 2 and threatening that he would not quit the land, Ranga Rao, the husband of defendant No.4 suggested to purchase the land in the name of the defendant No.4. Accordingly, the suit agreement in Ex.B1 was executed on 20-3-1979 by defendant Nos.1 and 2 in the name of defendant No.4 to an extent of Ac.4-00 for consideration of Rs.8,000/-per acre. So, the plaintiff is the real purchaser and he paid Rs.2,000/- earnest money on the date. It was agreed that a sum of Rs.3,000/-be paid by the end of April, 1979 and the balance payment after measurement of land before the end of May, 1979. Further, a counter agreement was also executed 'of the even date. Both agreements were handed over to the plaintiff. The plaintiff paid a further sum of Rs.3,000/- on 1-5-1979 which was duly endorsed. On measurement the area was found to be Ac.3-45 cents and the total consideration was coming to Rs.27,600/-. After adjusting Rs.5,000/-already paid, the plaintiff made further payment of Rs.22,268/- leaving a balance of Rs.332/- which was to be paid at the time of registration. The plaintiff was put in possession on 1 -5-1980 and the same was endorsed on the agreement. The plaintiff is a signatory to the counter agreement. Since the existing house fell down, the plaintiff constructed a house, which was numbered as Ass.No.129 with door No.3/28. The plaintiff is residing in the said house and paying taxes. The land revenue is paid partly in the name of the defendant No.4 and partly in the name of the plaintiff.However, subsequently, differences arose between the plaintiff and the defendant No.4 since Ranga Rao, the husband of the defendant No.4 required loan of Rs.6,000/-and the plaintiff arranged for the same with his junior maternal aunt's husband V. Giriraju of Kothapet, in the year 1981 with promise for repayment at the time of marriage of the eldest son of defendant No.4 which remained unpaid, even after his marriage. Since the plaintiff was demanding the money, the relations got strained. The plaintiff gave the agreement and the land revenue receipts to the husband of defendant No.4 to create confidence. However, at the harvesting of crop in 1981, Ranga Rao sought to take the crops. So the plaintiff got issued a notice dated 12-1-I9S2 to the defendants 1 and 2 for execution of the sale-deed, which was not replied to. Expecting that defendant No.4 would file a suit, the plaintiff filed a caveat on 18-1-1982, which was got refused by the defendant No.4 in Bhavadeverapalli village. And avoiding the Courts at Machilipatnam, defendant No.4 filed OS No.24 of 1982 on the file of the Principal District Munsif, Avanigadda on 22-1-1982 and got an ex parte order of injunction in IA No,34 of 1982. Though the plaintiff got the first crop, the second crop was taken away by the defendant No.4 under the guise of the injunction orders. The loss of the second crop of 70 bags was worth Rs.3,000/-. While so, defendants 1 and 2 executed a sale-deed on 20-5-1982 and got registered on 21-5-1982 for an extent of Ac.3-55 cents. Though consideration was paid by the plaintiff, it was wrongly shown as if it was paid by the defendant No.4. The sale is nominal, collusive and fraudulent. In the written statement filed by defendants 1 and 2 in OS No.24 of 1982, it was admitted that the real purchaser is the plaintiff but taken in the name of the fourth defendant. Hence defendants 1 and 2 are under an obligation to execute the sale-deed in favour of the plaintiff and the defendants 3 and 4 should join the same. Hence the suit.
4. Defendants 1 to 3 remained ex parte even without filing their written statements. The fourth defendant filed her written statement denying the plaintiffs right in the suit property and admitting the agreements Exs.B6 and B7 executed in favour of the 5th defendant. She pleaded that she alone has paid the sale consideration to defendants 1 and 2 under Ex.B1 and that the plaintiff has nothing to do with the said transaction. She further alleged that the suit was got filed by the defendants 1 and 2 in collusion with the plaintiff.
5. The fifth defendant in his written statement has contended that he purchased Ac.2-55 cents out of the total extent of Ac.3-55 cents covered by the registered sale-deed Ex. A1 and on the date of his contract with the fourth defendant under Ex.B6, possession could not be delivered due to an injunction order granted by the District Munsif Court, Avanigadda in OS No.24 of 1982 filed by the plaintiff.
6. Apart from contesting the suit fifed In OS No.2 of 1985 the defendant No.5 has also filed another suit in OS No.8 of 1985 seeking specific performance of the agreement in his favour executed by defendant No.4 on 20th May, 1982 whereunder he purchased a part of the land of Ac.3-55 cents in Ex.B6. The said agreement refers to the delivery of possession. However, it was pleaded that in view of the interim injunction subsisting in OS No.24 of 3982, possession could not be delivered and it was understood between him and the fourth defendant that possession will be delivered only after the disposal of the injunction application. Therefore, they have executed another contemporaneous agreement In Ex.B7 dated 25-7-1982. Thus he sought for specific performance of the said agreements in the other suit.
7. The contentions and the allegations as made by the respective parties run onthe self same lines in both the suits and therefore, as stated above, for the purpose of convenience, the parties as arrayed in OS No.2 of 1995 have been adopted here.
8. Both the suits were clubbed together and a joint trial was conducted on the issues as framed in those suits. The Court below has framed the following issues in both the suits.
OS No.2 of 1995:
1. Whether the plaintiff is entitled to the relief of specific performance as prayed for in the suit?
2. Whether the sale-deed dated 20-5-1982 executed by defendants 1 and 2 in favour of the fourth defendant is sham, nominal and collusive?
3. Whether the contract of sale dated 20-3-1979 is true and valid?
4. To what relief?
Additional Issue:
Whether the suit as framed is maintainable in view of the pleading of benami sale-deed taken in the name of the fourth defendant for the plaintiff?
OS No.8 of1995:
1. Whether the plaintiff is entitled to the specific performance of the contract of sale dated 25-7-1982?
2. Whether the plaintiff is entitled to the relief of possession?
3. To what past and future profits if any is the plaintiff entitled?
4. Whether the plaintiff is entitled to the alternative relief as claimed in thesuit?
5. Whether the contract of sale dated 25-7-1982 is true, valid and binding on the defendant?
6. Whether the contract of sale dated 25-7-1982 is hit by the doctrine of lis pendens?
7. Whether the second defendant is entitled to exemplary costs?
8. To what relief?
9. On the basis of a joint memo, both the suits were clubbed and evidence was recorded in O. No.2 of 1995. The plaintiff examined PWs.1 to 7, marking Exs.A1 to All and the defendant examined DWs.1 and 2 and marked Exs.B1 to B18.
10. On the issues framed, the lower, Court considered the evidence and dismissed the suit in OS No.2 of 1995 and decreed OS No.8 of 1995 holding that the plea of benami is permissible by the plaintiff; there is no evidence to show as to PW1 being put in possession; the contract in Ex.B1 is true and valid in between defendants 1, 2 and 4 but not with PW1; PW1 cannot question Ex.A1; the plaintiff is not entitled for specific performance; Ex.B6 is enforceable only against its executant; the plaintiff is not entitled to challenge Ex.B6 even on lis pendens; the plaintiff in OS No.8 of 1995 is entitled for specific performance and possession on deposit of balance consideration and the first defendant is not entitled for damages against plaintiff in OS No.8 of 1995 and also for any refund of consideration.
11. Sri P. Sriraghuram, Counsel appearing for the appellant in both the appeals contended that initially, the trial of the case proceeded on the lines of the principles laid down in Mithilesh Kumari v. Prem Behari Khare, : [1989]177ITR97(SC) and it was only at the fag end of the proceedings there is substantial change in the principles as laid down in R. Rajgopal Reddy v. P. Chandrasekharan, : (1995)124CTR(SC)311 . Therefore, the entire proceedings are vitiated and the matter requires to be remanded forfresh enquiry on the lines of the newly laid principles. Further, he sought to attach the findings of the Court below by contending that Exs.B1 and A2 the agreement and the counter agreement respectively have not been properly the appreciated with other evidence on record. Ex.B1 shows stamp purchased by the plaintiff and Ex.B2 shows the endorsement of the payment made by the plaintiff marked as Ex.B3. PW1 was present at the time of the execution. The plaintiff has been continuously in possession, which is supported by Exs.A3 to A9 house tax receipts and Ex.A10 land revenue receipt. He pointed out that the respondents have filed an application in this Court for appointment of receiver, which itself suggests amply that they are not in possession. The absence of defendants 1 to 4, who remained ex parte and their total non-participation is crucial. The best person to throw light being defendant No.4, conspicuously she remained ex parts. So necessary presumptions have to be drawn. The plaintiff has already constructed a hut with No.B/29 and paying tax with Ass.No.139. The interim injunction granted in IA No.34 of 1982 in OS No.24 of 1982 was appealed and it was remanded. The sale-deed by defendants 1, 2 and 4 in Ex.A1 dated 20-5-1982 is not valid, since the matter was subjudice. Further, though the agreement in Ex.B6 dated 25-7-1982 was alleged to have been executed in favour of defendant No.5, possession was not delivered. The evidence of PWs.1 to 7 support the possession of the plaintiff. The plaintiff had already paid substantial amount of Rs.22,600/- and a balance of Rs.332/- only remained. The claim for specific performance in the other suit OS No.8 of 1995 is wholly unsustainable as there existed no right to alienate and no possession as such can be claimed from a stranger.
12. Sri 5. Venkateswara Rao, Counsel appearing for the respondent-defendant No.5 and cross-objector, sought to sustainthe findings of the Court by contending that the Court did take note of the later decision of the Supreme Court and on consideration of the same, allowed the plaintiff to raise the plea. He pointed out that in the alleged benami nature of transaction, no motive is attributed or established. The appellant claimed only as a tenant. Ex.A2, the alleged counter agreement is only a xerox copy and the original is not filed. The Ex.B1 agreement does not refer to any such counter agreement. The plaint is silent on the counter agreement. None of the witnesses of Ex.B1 or A2 was examined. Strangely, there is no signature of defendants 1 and 2 on the endorsement. The plaintiff has no capacity to pay such huge amount of consideration. No receipts are filed in respect of the endorsement in Exs.B2, B3 and B5. The tax and revenue receipts in Ex.A3 to A11 are subsequent to the suit. Ex.B14 dated 13-4-1982, the written statement filed in OS No.24 of 1982 at the earliest point of time does not refer to Ex.A2. The notice given by DW1 in Ex.B9, though acknowledged by the plaintiff and the fourth defendant, remained unreplied by the plaintiff though the fourth defendant replied. Therefore, for the first time, the plea of benami is brought in against a stranger. The schedules in Ex.B1 and A2 do not tally. Thus the plaintiff has neither any enforceable right nor any discretion be exercised in his favour. He further sought for mesne profits through the cross-objections filed here against the rejection. He contended that the Court erroneously relied on Ex.B6 for their rejection and Ex.B7 was not considered. In the application filed for appointment of receiver, the Court dismissed IA No.716 of1984 and in appeal, this Court allowed the same as per the order in CMA No.230 of1985 dated 18-8-1986 with a direction to deposit Rs.3,000/- and the said amounts are being deposited. However, in spite of dismissal of the suit, the amounts are not directed to be paid to the successful party. In fact, the claim includes the past and future mesne profits.
13. The appellant had filed CMP No.12749 of 1999 for receiving the document of compromise dated 27-12-1984 as additional evidence in the appeal on the ground that the said document was with the advocate at Machilipatnam who died subsequently due to cancer in 1997. The application was contested on behalf of the respondent by objecting that no foundation is laid for receipt of the document as the entire pleadings and evidence is silent all along.
14. From the rival contentions raised on behalf of the appellant and the respondent-defendant No.5, the points which arise for consideration are:
1. Whether the plaintiff claiming as the real owner is entitled to seek specific performance of the agreement in Ex.A1 ?
2. Whether Ex.315 sale-deed dated 20-5-1982 by the defendants 1 and 2 to the fourth defendant is valid ?
3. Whether Ex.B6 dated 25-7-1982 executed by the fourth defendant in favour of the fifth defendant is enforceable ?
4. Whether the fifth defendant is entitled to the mesne profits
15. The entire case of the plaintiff rests on the sole ground of benami nature of transaction. The plaintiff claims that the agreement in Ex.B1 dated 20-3-1979 by defendants 1 and 2 in favour of the fourth defendant is only benami. He is the real owner/purchaser and paid substantial amount of Rs.22,600/- out of the total consideration. The real lis appears to be between the plaintiff on the one hand and defendants 1 to 4 on only contesting party is the defendant No.5, who is a assistance of defendants 1 to 4. There is no controversy on Ex.Bl dated 20-3-1979. The entire gamut of the plaintiffs case centers around Ex.A2, the counter agreement. On the face of thewritten instrument in Ex.B1, the terms are clear. The sellers are defendants 1 and 2 and the purchaser is the fourth defendant, who paid the advance. The total extent covered under Ex.B1 is Ac.3-45 cents. The parties are inter-related. Defendants 1 and 2 are the husband and wife and the third defendant is their son. The fourth defendant is the junior mother-in-law of the plaintiff. PW1 the plaintiff supports his own case. PWs.1 to 7 only lend support on the possession of the plaintiff. Of them, PWs.2 to 4 are the purchasers of land from PW1. PW5 is the elder brother of PW1. PW7 is the brother in law of PW1. Therefore, no credence can be given to these witnesses on the crucial issues. They do not speak on the suit related documents. Thus except the sole self serving evidence of PW1, there is no independent and supporting evidence. The plaintiff did not choose to examine any of the witness of Ex.B1 dated 20-3-1979, nor any explanation is given for their non-examination. Ex.A2, the counter agreement of the even date is only a photostat copy. No original is produced. No witness is examined in support of its proof. No foundation is laid for allowing such secondary evidence. Non examination of witnesses to Ex.B1 and A2 would lead to many a doubt and presumptions against, on the very plea of benami. More so, when defendants 1 to 4 remained ex parts and there being no opportunity to test their claim, the plaintiff should not have shelved his heavy responsibility in establishing the link between Ex.A2 and B1 and the benami nature of the transaction. Mere endorsements in Ex.B2, B3 and B5 would not confer any rights of an agreement holder or a real owner. As rightly pointed out on behalf of the respondent, the plaintiff at the earliest opportunity available in his written statement in Ex.B14 in the suit in OS No.24 of 1982 had lost opportunity and no claim is laid on Ex.A2. Further he kept himself silent to the notice issued by DW1 in Ex.B9. This suit is filed in June, 1982 and the benami plea sprouts up. Even though elaborate argumentshave been advanced at the bar, no semblance of case is made out to indicate or establish benami. Section 2(a) of the Benami Transactions (Prohibition) Act, 1988 defines 'benami transaction' as meaning any transaction in which property is transferred to one person for a consideration paid or provided by another person. The plea of benami casts onerous burden on the party raising it and it calls for substantial, convincing evidence and material on all the surrounding circumstances. However, there is no cogent evidence to show payment of purchase money by the plaintiff, the intention behind such contribution and subsequent conduct. Ex.B1 does not refer to Ex.A2 nor gives any indication thereof. The endorsements in Exs.B2, B3 and B5 are of 1-5-1979, 13-5-1980 and 1-5-1980. Ex.A2 does not bear any endorsement of a similar nature. If really the plaintiff is the real owner, there is no explanation as to why endorsements are excluded from Ex.A2. It is not necessary to go into any other evidence. However, in pursuance of Ex.B1, the sale-deed is executed in Ex.A1 and Ex.B15 dated 20-5-1982 by the defendants 1 and 2 in favour of the fourth defendant. Further, in the presence of an agreement in Ex.B6 by the fourth defendant in favour of the fifth defendant, nothing remains to be enforced in favour of the plaintiff. Thus the plaintiff has no right nor the defendants have any enforceable obligation and thus the plaintiff is not entitled to seek any relief under Ex.B1. The fourth defendant had acquired already vested rights under Ex.B15 and the same is valid. Further under Ex.B6, the defendant No.5 i.e., the plaintiff in the other suit OS No.8 of 1985 is entitled to seek specific performance.
16. On the last aspect of mesne profits, as rightly held by the Court below and in view of the finding arrived at holding that the plaintiff has no right and it is only the fourth defendant who is the real purchaser, no liability can be fastened on the plaintiff. If the case of the fifth defendant is that inview of the interim injunction obtained by the fourth defendant possession was not actually taken, though Ex.B6 shows the delivery of possession, the remedy of the, fifth defendant is only to proceed against the fourth defendant. However, as regards the amounts in deposit in pursuance of the interim orders pending the suit, the same should be given to the successful party viz., the defendant No.5 (plaintiff in OS No.8 of 1995) as the plaintiff cannot be permitted to gain any benefit under a false claim.
17. The appellant did not make out any valid claim. Further, the document of compromise is sought to be ushered in for the first time without any base in the Court below and hence it is not required for consideration at this stage and the appellant failing to make out any case on merits for the receipt of the additional evidence as required under Order 41, Rule 27 of the Code of Civil Procedure, CMP No. 12749 of 1999 filed for receiving the document of compromise as additional evidence is dismissed.
18. In the result, both the appeals are dismissed and the cross-objections are rejected. However, in the circumstances, there shall be no order as to costs.