Loknath Khound Vs. Gunaram Kalita and ors. - Court Judgment

Excerpt:
- - act, more particularly to explanation i which was added by the amending act of 1959. that explanation states, inter alia, that where any transaction relating to immovable property is required by law to be and has been effected by a registered instrument, then all other conditions of the explanation being satisfied the same shall be deemed to be notice of such instrument. it is contended by shri sanna that an agreement like ext. b.l. hansaria, j. 1. a plot of land measuring 2 (two) bighas covered by dag no. 331 of patta no. 55 of barunguri kisamat, mouza-jiria, in the district of nowgong is the subject matter of the present proceeding. the land, admittedly, initially belonged to the plaintiff gunaram kalita. being in dire need of money,he wanted to mortgage the land to hatem ali, but hatem ali could not advance any money on mortgage; he insisted on sale, which request was complied with as gunaram must have money to take care of his dire need. accordingly, a registered sale deed was executed on 14-11-70 and on the same day a registered ekrarnama was gone into covenanting that hatem would reconvey the land to gunaram if the consideration, which was fixed at rs. 1,200/- would be repaid within five years. the.....

Judgment:

B.L. Hansaria, J.

1. A plot of land measuring 2 (two) bighas covered by dag No. 331 of Patta No. 55 of Barunguri Kisamat, Mouza-Jiria, in the district of Nowgong is the subject matter of the present proceeding. The land, admittedly, initially belonged to the plaintiff Gunaram Kalita. Being in dire need of money,

he wanted to mortgage the land to Hatem Ali, but Hatem Ali could not advance any money on mortgage; he insisted on sale, which request was complied with as Gunaram must have money to take care of his dire need. Accordingly, a registered sale deed was executed on 14-11-70 and on the same day a registered ekrarnama was gone into covenanting that Hatem would reconvey the land to Gunaram if the consideration, which was fixed at Rs. 1,200/- would be repaid within five years. The plaintiff's case is that he made repeated verbal demands on Hatem to comply with the terms of ekrarnama and issued registered notice also but to no avail. Not only this, to the dismay of the plaintiff he came to know subsequently that Hatem had transferred the land to defendant 2 Loknath Khound, who is the appellant in this case. This sale was for a sum of Rs. 2000/- and was on 14-11-73. The plaintiff, therefore, having no alternative filed a suit for specific performance of the agreement, which was dismissed by the learned trial Court only on the ground that sale to Loknath by Hatem was with the concurrence of the plaintiff. So, defendant 2 was regarded as bona fide purchaser without notice of the ekrarnama. On appeal being preferred, it has been held by the learned District Judge that the plaintiff had no part to play in the transaction gone into between defendant No. 1 Hatem Ali and Loknath Khound, defendant No. 2. The learned Court below did not accept the case of defendant 2 that he had no knowledge about the agreement of defendant 1 with the plaintiff. To the question of waiver raised by the appellant, the learned District Judge negatived the same by stating that even if the plaintiff was present at the time of transaction of sale between defendants 1 and 2, the same would not amount to waiver.

2. Defendant 2 has appealed to this Court and the appeal was admitted on two substantial questions of law : --

'(1). Whether Ext. 1 is contrary to Sections 10, 11 and 14 of the Transfer of Property Act and whether a decree for specific performance of such contract can be passed or not?

(2). Whether registration of contract for sale is a notice to all casting a duty on the purchaser to make an enquiry?

3. Let these two questions of law be first answered. In so far as the first question is

concerned, Shri Sarma has relied on two decisions of the Allahabad High Court. The first is Mahram Das v. Ajudhia, (1886) ILR 8 All 452. The Court has observed in this decision that in such a case a deed of sale and of the ekrarnama must be regarded as constituting one transaction, that is, they must be read together to find out the nature of the transaction entered into between the parties. There is no dispute to this proposition. A reference to the terms of the transaction gone into between the parties in that case shows that it was provided that the purchaser would reconvey the land to the seller and never to others. This was regarded as contrary to Sections 10 and 11 of the T. P. Act as it absolutely restrained the transferee from parting with or disposing of his interest in the property. A reference to the present agreement shows that by the terms of Ext. I, Hatem Ali was not absolutely restrained from transferring the land to anybody else he chose to do so, and that the ekrarnama only states that if within the period of five years, the plaintiff offers the sum of Rs. 1,200/-, the land would be reconveyed to him. The terms of the present ekrarnama are thus different from those which was dealt by the Allahabad High Court in Mahram. Similar is the position, so far as Asghari Begam v. Maula Baksh, AIR 1929 All 381, where a deed of transfer at first absolutely transferred the property to another, but by subsequent clause made it subject to the condition that the transferee would not part with or dispose of his interest to any person other than the transferor. Such a condition was held to be void being hit by Section 10 of the T. P. Act. In the present ekrarnama, we do not find any such condition. It permits the transferee to part with or dispose of his interest in the land to any other person but not within the period of five years. Ext. I, therefore, cannot be said to be hit by Section 10 or 11 of the T. P. Act. In so far as Section 14, which has also been mentioned in question No. 1 is concerned, it may be stated that the same is not pressed before me by Shri Sarma.

4. Coming to the second question framed by the Court, Shri Sarma contends that registration of a document cannot be said to be constructive notice in all cases. He refers to Section 3 of the T. P. Act, more particularly to Explanation I which was added by the Amending Act of 1959. That Explanation

states, inter alia, that where any transaction relating to immovable property is required by law to be and has been effected by a registered instrument, then all other conditions of the Explanation being satisfied the same shall be deemed to be notice of such instrument. It is contended by Shri Sanna that an agreement like Ext. 1 is not required by law to be registered and as such constructive notice of the same cannot be imputed to defendant 2. He refers in this connection to a pre-1929 decision of the Privy Council as reported in AIR 1921 PC 112 (Tilakdhari v. Khedan Lal) where it was observed at page 117 that 'Notice cannot in all cases be imputed from the mere fact that a document is to be found upon the Indian Register of Deeds'. In so far as post-1929 decision is concerned, reliance is placed on Hira Chand v. Kashinath, AIR 1942 Bom 339, where it was held that as an agreement for a mortgage was not compulsorily registrable, the fact that it was so registered could not be used as constructive notice of the transaction.

5. Shri Goswami, on the other hand, states that though by virtue of the Explanation-I, constructive notice may not be impugned to defendant 2, if an enquiry or search would have been made by him which he ought to have made he would have known about the fact of ekrarnama inasmuch as both the sale deed (Ext. B) in favour of defendant No. 1 and ekrarnama (Ext. 1) were executed and registered on the same day. This apart, defendant 1 himself admitted, of course, in recross-examination, that he had informed defendant No. 2 that he had given an undertaking to the plaintiff that he would reconvey the land on the latter's paying a sum of Rs. 1,200/-. Shri Sarma has objection to the re-cross-examination of defendant No. 1 who was examined as DW 2. According to the learned Counsel, there is no such provision in law where re-cross-examination of a witness is permissible. He refers in this connection to Order 18, Rule 17, Civil Procedure Code which has empowered the Court to recall a witness and to put such questions as the Court thinks fit. Some reliance is also sought to be placed on Bombay Municipal Corporation v. Panchan, AIR 1965 SC 1008, in para 5 of which it was observed by the Supreme Court that a Court has no power to compel a party to cross-examine a particular witness. Reference has

been made to this decision to enlighten the Court about the width of the power under Order 18, Rule 17. But then if there be no express provision in the Code in this regard, Section 151 of the Code can always be invoked for the ends of justice. In the present case, after DW 2, had been examined and cross-examined, a petition was filed to recall him as some very important question relating to the knowledge of defendant 2 regarding the agreement with the plaintiff could not be put to the witness. This was definitely an important aspect of the case and I would not think if cause of justice suffered by allowing the prayer.

6. In view of all the above, the finding of the Court below that the plaintiff had no part to play in the agreement which was entered into between defendants 1 and 2, which finding has been arrived at after knowing the discrepancy in the evidence of DWs 3 and 4 in this regard, it has to be held that defendant 2 had notice of the agreement between the plaintiff and defendant 1.

7. In view of this, it is really not necessary to make any observation about waiver of the right of re-conveyance to the plaintiff. None-the-less, it may be stated that the observation of the learned District Judge in this regard is against the view expressed by the Supreme Court in Satyanarayana v. Y. Rao, AIR 1965 SC 1405. It is lastly submitted by Shri Sarma that as granting of the relief of specific performance is a discretionary remedy, the appellate Court ought not to have disturbed the view of the learned trial Court. The learned Counsel refers to Section 20 of the aforesaid Act and in particular relies on Clauses (a) and (b) of Sub-section (2) which have provided that in cases covered by these clauses, a Court may properly exercise discretion not to decree specific performance. Clause (a) states that this may not be done if the terms of the contract or the conduct of the parties gives the plaintiff an unfair advantage over the defendant. As per Clauses (b) specific performance may not be decreed where it would 'involve some hardship on the defendant which he did not see'. Some observations made by Dr. S. C. Banerjee in his Tagore's Law Lectures on 'Law of Specific Relief have also been pressed into service where it is stated that if the contract itself be unjust or unfair, or unreasonable, the same may not be specifically enforced. It is

contended by the learned Counsel that this aspect had totally missed the Courts below. It is true; but even if these aspects are borne in mind, it would be difficult to say that the plaintiff in the present case was trying to take any unfair advantage over the defendant or that the specific performance of the contract would involve hardship on them. 1 have taken this view because the case of the plaintiff is that being in dire need of money he had really wanted to mortgage his own land, but Hatem Ali would not agree to this, but the plaintiff did need money, so he had to agree to enter into a sale transaction along with Ext. 1 to reconvey the same at the price at which it was sold. No doubt, after a period of five years, the value of the land might have increased. But then see the case of defendant 1 himself in his written statement where he says that out of Rs. 2000/- received from defendant 2, he had retained for himself an amount of Rs. 1,200/-(which was the consideration of the sale by the plaintiff) and the remaining amount was given to the plaintiff. So, if the land had been reconveyed to the plaintiff at Rs. 1,200/-, it cannot be said that the same would have caused hardship on the defendant, or that the plaintiff was trying to take unfair advantage over them.

8. Lastly, it is rightly submitted that as Hatem Ali had already realised a sum of Rs. 2,000/- from the appellant, the sum of Rs. 1,200/- which is lying deposited in the Court ought to be received by the appellant and not by Hatem Ali, This is a fair prayer and I allow the same.

9. Accordingly, the appeal is dismissed. But it is ordered that the amount of Rs. 1,200/-lying in deposit in the Court below would be handed over to the appellant. It is stated by Shri Goswami that re-conveyancing deed has already been executed by the Court below. On the facts and circumstances of the case, I leave the parties to bear their own costs before this Court.