1996 (3) TMI 574 - HC - Indian Laws

Summary

Issues Involved:
1. Validity of the temporary injunction granted by the lower court.
2. Alleged suppression of defective title by the appellants.
3. Determination of possession of the suit property.
4. Compliance with Section 55(1)(a) of the Transfer of Property Act.
5. Equitable relief and safeguarding interests of both parties.

Detailed Analysis:

1. Validity of the Temporary Injunction Granted by the Lower Court:
The primary issue in this appeal is whether the temporary injunction granted by the lower court is justified. The court below granted the injunction to prevent the appellants from alienating or disposing of the property until they clear their title. This decision was based on the prima facie evidence that the appellants' title was defective due to the escheat proceedings under the Kerala Escheats and Forfeiture Act, 1964, as indicated by Ext. A-6 notification.

2. Alleged Suppression of Defective Title by the Appellants:
The respondent alleged that the appellants suppressed the defective nature of the title at the time of executing Ext. A-1 agreement. The notification (Ext. A-6) issued by the District Collector, Kozhikode, under Section 5 of the Kerala Escheats and Forfeiture Act, 1964, indicated that the properties had escheated to the Government in 1951. The appellants did not respond to the respondent's notices (Ext. A-2 and Ext. A-3) demanding an explanation regarding the title. The court found that the appellants' silence and failure to address the defective title allegations adversely affected their case.

3. Determination of Possession of the Suit Property:
The court examined whether the respondent was put in possession of the property at the time of executing Ext. A-1 agreement. The agreement contained conflicting clauses regarding possession. The 'former clause' suggested possession would be handed over upon the execution of the sale deed, while the 'latter clause' indicated that possession was given at the time of the agreement. The court concluded that the possession was indeed given to the respondent on the date of execution of Ext. A-1, based on the clear and unambiguous recitals in the agreement and the lack of timely rebuttal from the appellants.

4. Compliance with Section 55(1)(a) of the Transfer of Property Act:
Under Section 55(1)(a) of the Transfer of Property Act, the seller is obligated to disclose any material defect in the property or title. The appellants failed to disclose the escheat proceedings, which constituted a material defect. The court held that the appellants' failure to explain the defective title despite receiving notices from the respondent justified the temporary injunction.

5. Equitable Relief and Safeguarding Interests of Both Parties:
The court emphasized that the grant of injunction is an equitable relief, and it must ensure fairness to both parties. While confirming the temporary injunction, the court directed the respondent to furnish security for the balance sale consideration of Rs. 20 lakhs in two installments. This measure was to safeguard the appellants' interests while maintaining the injunction.

Conclusion:
The court confirmed the temporary injunction granted by the lower court, emphasizing the need for the appellants to clear the defects in their title. The respondent was directed to deposit the balance sale consideration as security. The court also directed the lower court to expedite the disposal of the suit within six months. The appeal was disposed of with no order as to costs.