Pushpagiri Mutt Vs. C. Indiramma - Court Judgment

P.S. Narayana, J.

1. Heard Sri R. Subba Rao, Counsel representing the appellant and Sri O. Manohar Reddy, Counsel representing the respondent.

2. Pushpagiri Mutt, represented by its Manager, defendant in the suit, is the appellant in the Second Appeal. The respondent is the plaintiff. The parties are referred to as plaintiff and defendant as arrayed in the original suit for the purpose of convenience.

3. The plaintiff instituted the suit O.S.No. 49784 on the file of Subordinate Judge, Penukonda, for the relief of specific performance of an agreement of sale dated 10-1-1983 by the defendant and to execute a registered sale deed in favour of the plaintiff in respect of plaint schedule property for Rs. 11,200/- and for costs and also for such other relief or reliefs as the Honourable Court may deem fit and necessary in the circumstances of the case in the interest of justice.

4. The factual matrix as narrated in the respective pleadings of the parties can be specified as hereunder.

5. It was pleaded in the plaint that the defendant advertised that the suit land would be sold in public auction to the highest bidder on 10-1-1983 at Krishnapuram Village by its G.P.A. holder after obtaining permission of the Deputy Commissioner, Hindu Religious Institutions and Endowments Board, Kurnool. It was also pleaded that the said G.P.A, holder of the defendant Mutt along with Assistant Commissioner of Endowments. Anantapur and Deputy Commissioner of Endowments, Kurnool held public auction on 10.1.1983 at 9 a.m. according to the conditions of public auction published by them in the said public auction. It was farther pleaded that the plaintiff, along with eight other persons, participated by depositing Rs. 500/- each with the G.P.A. holder of the defendant and ultimately the plaintiff became the highest bidder for Rs. 11,200/- and the bid was knocked down in her favour for Rs. 11,200/-. Thus the plaintiff became highest bidder and sale was knocked in favour of the plaintiff. The plaintiff in addition to the amount of Rs. 500/-which was already deposited had paid Rs. 2,000/- as part of the bid amount. Thus the plaintiff has paid Rs. 2,500/- towards the sale price and defendant agreed to sell the suit land to the plaintiff for Rs. 11,200/-and received Rs. 2,500/- as the sale price by knocking down the bid in favour of the plaintiff on 10.1.1983 in Krishnapuram Village and agreed to get the necessary sale deed executed and get it registered at the expenses of the plaintiff after receiving the balance of consideration of Rs. 8,700/-. The plaintiff has been always ready and willing to perform her part of agreement but the defendant has been postponing the same on some pretext or other and in fact the plaintiff was ready to pay the balance of consideration and take necessary sale deed. A lawyer's notice was also got issued to the defendant as well as the Deputy Commissioner, Endowments, Kurnool and Commissioner of Endowments, Hyderabad. The Deputy Commissioner and the defendant received the same, but have not replied for it and the acknowldgement with regard to registered notice sent to the Commissioner, Endowments, Hyderabad had not been received.

6. The defendant filed a written statement admitting the public auction held on 10.1.1983. It was also admitted that the plaintiff became the highest bidder for Rs. 11,200/- in the public auction and the sale was knocked down in her favour and she had paid Rs. 2,500/- on that day. It was further pleaded that as per condition No. 3 of the sale conditions which were read over to intending bidders including the plaintiff, the auction held on 10.1.1983 by the agent of the defendant was subject to confirmation by the Commissioner, Endowments, Hyderabad. The said condition is mandatory and binding on the plaintiff. On 13.1.1983, the Manager of the defendant Mutt sent up a report to the Commissioner, Endowments, Hyderabad requesting him to approve the sale held on 10.1.1983 clearly stating therein the circumstances under which the sale was held and requesting him to confirm the sale in favour of the plaintiff. But the Commissioner, Endowments, Hyderabad had refused to confirm the sale on 3-1-1984 and communicated the same to the defendant by a telegram on 4.1.1984. The same is confirmed by a post copy which was received by the defendant on 10.1.1984. The defendant sent intimation by post to the plaintiff on 12-1-1984 stating that the Commissioner had refused to confirm the same and the same must have been received by the plaintiff in due course. On 5.1.1984, the Commissioner had sent a regular copy of the order refusing to confirm the sale and the same was received by the defendant on 16.1.1984. On 19.1.1984 the defendant sent by registered post acknowledgment due to the plaintiff, a copy of the order of the Commissioner. The same was returned stating that the plaintiff was not available in the village. On 19.1.1984, this defendant received registered notice sent by plaintiffs Advocate. Since a copy of the order of the Commissioner was already sent by registered post on 19.1.1984 itself, no reply was sent to the plaintiffs notice. The plaintiff is well aware of the facts that the sale held on 10.1.1983 is subject to the confirmation by the Commissioner of Endowments, Hyderabad and she is also aware that the Commissioner had refused to confirm the sale and without adverting to the refusal in her plaint, the present suit had been filed for specific performance as if the plaintiff is not aware of the refusal by the Commissioner. There is no agreement between the defendant and the plaintiff, nor is there any contract to the effect that the defendant is going to sell the suit land to the plaintiff. The defendant also did not agree to receive the balance of consideration of Rs. 8,500/- and execute a sale deed. So there is no breach of alleged contract of agreement on the part of this defendant as adverted to by the plaintiff. The suit filed for specific performance to execute the sale deed in favour of the plaintiff for the suit land does not lie and the same is not maintainable under the circumstances of the case.

7. On the strength of the respective pleadings of the parties, two issues were settled and PW-1 and PW-2 were examined on behalf of the plaintiff and Exs.A-1 to A-10 were marked and DW-1 was examined on behalf of defendant and Exs.B-1 to B-8 were marked. The Court of first instance on appreciation of the oral and documentary evidence came to the conclusion that the defendant has to execute a sale deed in favour of the highest bidder only when the sale is confirmed by the Commissioner of Endowments, Hyderabad and since the sale was not confirmed by him, the defendant is under no legal obligation to execute the sale deed in favour of the plaintiff and so long as the sale is not confirmed, the plaintiff has no cause of action to file the suit against the defendant nor she can make a demand to execute the sale deed in her favour in respect of the suit land and on these grounds the suit was ultimately dismissed, with costs. Aggrieved by the same, the plaintiff preferred A.S.No. 23/89 on the file of Additional District Judge, Hindupur and the appellate Court, on appreciation of the oral and documentary evidence and also observing that there is a legal obligation cast on the defendant in the suit as well as the Commissioner, Endowments, to see that the sale is confirmed or rejected within the period stipulated by the statute, and in the light of the same it should be deemed that the sale had been confirmed and hence the plaintiff is entitled to a decree for specific performance, allowed the appeal decreeing the suit, without costs. Aggrieved by the same, the defendant had preferred the present Second Appeal.

8. Sri Subba Rao, the learned Counsel representing the appellant/defendant/ Pushpagiri Mutt had pointed out to Ground Nos. 13 to 17 which had been raised as substantial questions of law in the Second Appeal. The learned Counsel submitted that when the plaintiff is interested in questioning the order of refusing confirmation by the Commissioner, Endowments, definitely the Commissioner is a necessary party and the suit is liable to be dismissed on this ground alone. The learned Counsel also contended that the question of deemed confirmation does not arise at all since the Commissioner has to either confirm or refuse to confirm within the prescribed period. But however, the mere fact that the order was made and communicated at a later point of time, will not amount to deemed confirmation. The learned Counsel also had taken me through the oral and documentary evidence and also the findings recorded by the Court of first instance and also by the Appellate Court and had pointed out that even otherwise on facts also, the plaintiff is not entitled to the equitable relief of specific performance since she had not deposited 1/3rd of the bid amount as required by the conditions. The learned Counsel had drawn my attention to the findings recorded by the Court of first instance in this regard which had been reversed by the Appellate Court. The learned Counsel further had pointed out to the relevant Rules under Sections 74 and 107 of A.P. Charitable and Hindu Religious Institutions and Endowments Act 1966, Act 17 of 1966, and also the present Rules of 1987 framed in exercise of the powers conferred by Section 80 read with Section 153 of A.P. Charitable and Hindu Religious Institutions and Endowments Act, 1987, Act No. 30 of 1987. The learned Counsel submitted that in view of the date of auction, the old Rules alone are applicable to the present case. But however, the language of Rule 31(10) of the old Rules and Rule 25(14) of the present Rules virtually is in pari materia except for the difference of the period of six months and three months under the respective Rules. The learned Counsel submitted that this will not alter the situation in any way for the reason that a finding of fact had been recorded by both the Courts below that there was no confirmation by the Commissioner, Endowments Department. But however, the Appellate Court on the ground of deemed confirmation had decreed the suit which cannot be sustained since the defendant is unable to perform the contract in question since unless such permission or approval is granted by the Commissioner of Endowments which is mandatory, the defendant cannot execute the sale deed at all. The learned Counsel also submitted that even otherwise since it is a relief of specific performance which is a discretionary relief, especially in the absence of compliance of the condition of deposit of 1/3rd amount by the plaintiff, she is not entitled to the equitable relief and in any view of the matter, the Appellate Court had totally erred in reversing the well considered judgment of the Trial Court in this regard and hence the judgment and Decree of the appellate Court are liable to be set aside.

9. Per contra Sri O. Manohar Reddy, the learned Counsel representing the respondent in the Second Appeal, the plaintiff in the suit, with all vehemence had contended that the refusal order was made nearly after one year beyond the specified period by the Rules and in such circumstances it should be taken that there was deemed confirmation. The learned Counsel also pointed out that the auction was conducted in accordance with the Rules and absolutely there was no default on the part of the plaintiff and as required by the Power of Attorney holder, the deposit of Rs. 2,500/- was made and this cannot be taken as advantage saying that the said deposit amount is less than 1/3rd of the bid amount. The Counsel also had drawn my attention to the findings recorded by the Appellate Court at paragraph 7 and had submitted that the facts of the case clearly go to show that the authorities of the Pushpagiri Mutt permitted the plaintiff to pay only Rs. 2,500/- and confirmed the auction in her favour as the highest bidder and except obtaining permission which is the obligation on the part of Pushpagiri Mutt, nothing more need be performed except to make payment of the rest of the amount on the part of the plaintiff. In other words, the learned Counsel contended that when it is the legal obligation on the part of the defendant Mutt to see that the confirmation is obtained, the said ground cannot be taken advantage to avoid the contract which is otherwise enforceable since all other terms and conditions had been duly complied with by the plaintiff in this regard. The learned Counsel further elaborating his submissions had drawn my attention to paragraphs 11 and 12 of the judgment of the Appellate Court and contended that the approval by the Commissioner or Endowments contemplated by the Rules is only directory and it cannot be said to be mandatory. The learned Counsel pointing out to Ex.B-4 had commented that this order cannot be said to be legal of a valid order for the reason that no reasons had been recorded and also the said order was not passed within the stipulated time and at any rate in view of the peculiar facts and circumstances, it should be taken that deemed permission had been granted and hence the defendant is bound to execute the sale deed in terms of the judgment and decree made by the Appellate Court in this regard. The learned Counsel while concluding had submitted that not only in law, but also on the ground of equity, the judgment and decree of the Appellate Court definitely are sustainable and since no substantial question of law is involved in the present Second Appeal, the Second Appeal is liable to be dismissed.

10. Heard both the Counsel at length.

11. As can be seen from the material available on record, through several questions had been pointed out as substantial questions of law, in substance, the following questions are the substantial questions of law which arise for consideration in this Second Appeal:

(a) Whether the approval of the Commissioner, Endowments under Rule 31(10) of the Alienation of Immovable Property Rules (Gift, Sale, Exchange or Mortgage of Property) under Sections 74, 86(3), 90(3)(a) read with Section 107 of the A.P. Charitable and Hindu Religious Institutions and Endowments Act, is mandatory or directory?

(b) Whether the ground of deemed permission is sustainable in the facts and circumstances of the present case?

(c) Whether the Commissioner, Endowments also is a necessary and proper party to the suit in the facts and circumstances of the case?

(d) Whether the plaintiff had complied with all the terms and, conditions of the auction?

12. Questions (a), (b) and (c) can be answered together for the purpose of convenience.

13. The facts had been narrated above and the same need not be repeated again in detail. It is not in dispute that the suit land was put to sale by public auction on 10.1.1983 at 9 a.m., at Krishnapuram Village the G.P.A. holder after obtaining permission of the Deputy Commissioner, Hindu Religious Institutions and Endowments Board, Kurnool. It is also not in dispute that apart from the plaintiff, eight other persons participated in the said auction by depositing Rs. 500/- each and the plaintiff became the highest bidder for Rs. 11,200/-and the plaintiff had deposited Rs. 2,000/- in addition to the initial deposit of Rs. 500/-. PW-1 deposed about all the factual aspects. Ex.A-1 is the Photostat copy of the auction conditions. Ex.A-2 is the Photostat copy of the notice informing the date of auction. Ex.A-3 is the Photostat copy of the bid list, Ex.A-4 is the receipt for Rs. 2,500/- issued in the name of the plaintiff, Ex.A-5 is the office copy of notice issued on behalf of the plaintiff to defendant, Exs.A-6 to A-8 are the postal receipts for certain notices. Ex.A-9 is the postal acknowledgment sent by the defendant and Ex.A-10 is the postal acknowledgment signed by the Deputy Commissioner. Apart from PW-1, PW-2 also was examined. The G.P.A. holder of Pushpagiri Mutt was examined as DW-1 and Exs.B-1 to B-8 were marked. Ex.B-1 is the office copy of the letter addressed to the Commissioner, Endowments Department, Hyderabad dated 13.1.1983 intimating about the sale held on 10.1.1983. Ex.B-2 is the postal acknowledgment. Ex.B-3 is the telegram issued by the Commissioner, Endowments Department, Hyderabad to the defendant. Ex.B-4 dated 4.1.1984 is written communication sent to defendant confirming the telegram. Ex.B-5 is the office copy of the memo issued to the plaintiff. Ex.B-6 dated 7.11.1984 is another communication given by the Commissioner, Endowments Department, Hyderabad to the defendant. Ex.B-7 is the copy communicated to the plaintiff by registered post dated 19.1.1984. Ex.B-8 is the registered cover.

14. The evidence of PW-1, PW-2 and also DW-1 had been discussed in detail by both the Courts below. It is not in dispute that there is a condition that 1/3rd of the bid amount has to be deposited and 1/3rd of the bid amount in Rs. 11,200/- will come to Rs. 3,733-33 1/3 ps. But however, it is not in dispute that apart from initial deposit of Rs. 500/-, an additional amount of Rs. 2,000/- had been deposited, in total, Rs. 2,500/- and the receipt is Ex.A-4. Be that as it may, the main question which had been argued at length is relating to the obtaining of approval from the Commissioner of Endowments. Rule 31(10) dealing with Alienation of Immovable Property Rules under the A.P. Charitable and Hindu Religious Institutions Endowments Act 1966, Act 17 of 1966, which are applicable to the present case in view of the date of auction reads as hereunder:

'The Commissioner within six months from the date of sale shall either confirm or refuse the same and such confirmation or refusal shall be communicated to the Executive Officer or the Trustee concerned'.

Inasmuch as this is the relevant Rule, the corresponding Rule 25(14) under Act No. 30 of 1987 need not be discussed since the same is not relevant for the present case. It is also not in dispute that refusal by Commissioner, Endowments Department had been communicated by Ex.B-4. No doubt, the plaintiff is questioning the validity of Ex.B-4 also in the present suit. But however, the Commissioner of Endowments was not impleaded as a party. When the validity of an order passed by a statutory authority is impugned in the course of a judicial proceeding, be that a suit or otherwise, such a party is definitely a necessary party and in the absence of such a necessary party, an order declaring such order as invalid in law, definitely cannot be made. Apart from it, in view of the language employed in Rule 31(10) of the Rules referred to supra, it is definitely mandatory because the very object of obtaining approval of the Commissioner of Endowments in the case of sale of immovable properties of these Institutions is with a view to have a check or safeguard in the case of such sales and unless such confirmation is given by the Commissioner of Endowments and the same is communicated to the concerned Mutt, definitely the Mutt is not entitled to execute a sale deed. Otherwise, it will be definitely an invalid transaction. Hence, it is mandatory and obligatory on the part of the defendant Mutt to obtain confirmation in accordance with the rule specified supra and then only the defendant Mutt can execute the sale deed in pursuance of the auction already held. Prior thereto, the defendant Mutt has no right at all to execute a sale deed. When that being the position, it cannot be said that this rule is only directory and not mandatory. In my considered opinion, the Rule definitely is a mandatory one and the defendant Mutt is bound to obtain the approval as specified by Rule 31(10) and till such approval is granted, the defendant Mutt cannot execute a sale deed in favour of the plaintiff in pursuance 6f the auction.

15. Apart from this aspect of the matter, a contention relating to deemed permission had been raised and the Appellate Court having discussed about the rule position had arrived at a conclusion that since the rejection was nearly about one year thereafter subsequent to the auction it can be taken as deemed permission. When the law contemplates a particular thing to be done in a particular way, it should be done in that way only especially when the consequences or otherwise of non-compliance had not been specified in a particular case. Hence, I am also not inclined to accept with the finding of deemed permission and in this view of the matter, the findings recorded by the appellate Court definitely cannot be sustained in the light of the clear legal position which had been discussed supra. It is also needless to say that Ex.B-4 order cannot be impugned in the absence of necessary party - the Commissioner, Endowments Department, and in this view of the matter also the relief of specific performance cannot be granted.

Question (d): It is not in dispute that the conditions in Ex.A-1 definitely specify the deposit of 1/3rd of the bid amount. It is also not in controversy between the parties that the bid amount is for Rs. 11,200/- and it is needless to say that apart from the initial deposit of Rs. 500/-, additional amount of Rs. 2,000/- and in total Rs. 2,500/-alone had been deposited by the plaintiff and not 1/3rd of the amount No doubt an explanation is given that the Officers or the G.P.A. had demanded only for the said amount and hence such amount had been paid. There is no such suggestion to DW-1. There is no evidence also available on record giving such an explanation and hence 1 am not inclined to accept the said submission. Hence it has to be necessarily concluded that the plaintiff had not deposited 1/3rd of the bid amount as required by the auction conditions.

16. It is needless to say that the relief of specific performance is a discretionary relief and merely because it is lawful, automatically in all cases, such relief need not be granted. However, in the light of the fact that Ex.A4 was issued, it can be taken that the defendant Mutt had received an amount of Rs. 2,000/- apart from Rs. 500/- initial deposit on the date of auction, in total Rs. 2,500/- and it is also not in dispute that the said amount is lying with the defendant Mutt till today. It is no doubt true that in the fact and circumstances of the case, the relief of specific performance, at any stretch of imagination, cannot granted in favour of the plaintiff. The defendant is Pushpagiri Mutt. A finding had been recorded that the auction was held otherwise in accordance with law and the other concerned Officers also were present and in pursuance of the auction, the amount had been deposited by the plaintiff and the amount is lying with the defendant Mutt It is no doubt true that specifically the alternative relief of refund of the amount had not been prayed for. But however, in the plaint, relief (c) had been specified to grant such other relief or reliefs as the Hon'ble Court may deem fit and necessary in the circumstances of the case in the interest of justice. In view of the same, taking the peculiar facts and circumstances into consideration, since an amount of Rs. 2,500/- deposited by the plaintiff is lying with the defendant Pushpagiri Mutt from 10-1-1983 till today, it shall be just and equitable to order refund of the amount of Rs. 2,500/- with interest @ 6% per annum till the date of payment Except granting this relief, no other relief can be granted. Accordingly, the judgment and Decree of the appellate Court are hereby modified and the Second Appeal is partly allowed to the extent indicated above. No order as to costs.