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TMI Blog1967 (8) TMI 135X X X X Extracts X X X X X X X X Extracts X X X X ..... y between him (2nd plaintiff) and the 1st plaintiff and pretended as if he was interested in the second plaintiff. D.W. 2 the represented to the second plaintiff that the entire property of which he was possessed at that time, should be kept safe in the name of his son-in-law, the defendant. He also assured the second plaintiff that when he came back from military service and settled down, he would perform the marriage of the second plaintiff and would get the property released to him. On this representation he caused the second plaintiff to execute and deliver a collusive sale deed in favour of the defendant on 19th January, 1945, for Rs. 2,000 in respect of the schedule mentioned properties and some other property. This sale deed was without any consideration whatever. The plaintiffs alleged that the property conveyed by the sale deed Exhibit B-1 was worth at least Rs. 5,000 on the date of the execution of that document. There was no necessity for the second plaintiff to sell the property at that time. The property was nominally conveyed in favour of the defendant so that it might be prevented from being wasted by the 2nd plaintiff. The defendant was never in a position to purcha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... P.W. 13 agreed to the same and asked him for the money; but as he had no ready money he wanted time for one year. Later on he raised several frivolous contentions that the house was not necessary for him and that the land alone should be sold to him for Rs. 5000. In the beginning of September last, the plaintiffs and P.W. 13 insisted that the defendant should purchase the property as promised by him. The defendant in the presence of respectable people in the village, refused to recovery the property. As the second plaintiff had no money and was helpless to file a suit against the defendant, he sold the suit property to the 1st plaintiff for Rs. 5,000 on condition that the 1st plaintiff would bear all expenses and get the absolute rights of the second plaintiff in the suit property declared and the second plaintiff executed and delivered a registered sale deed in favour of the first plaintiff on 13th September, 1949. The second plaintiff gave a registered cowl dated 34th January, 1949, to P.W. 12 for five years in respect of the cultivable lands. In accordance with the terms of the said cowl, P.W. 12 has been enjoying the suit land from Fasli 1359. The defendant was not at all in po ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uit lands have been under the uninterrupted right and enjoyment of the defendant and also the cowldars under him. He averred that the sale was for full consideration. He took the plea that as he was in possession of the suit lands, the suit for mere declaration without the prayer for possession, is not maintainable in law. As the first plaintiff fraudulently obtained the sale deed not supported by consideration and attempted to dispossess the defendant forcibly, the defendant filed O.S. No. 604 of 1949 and obtained orders of injunction. All the allegations made in the plaint in the earlier suit are true. 4. The defendant denied the allegation by the plaintiffs that Exhibit B-1 is nominal and sham transaction and that it was not executed to be given effect to. He also denied that the second plaintiff was roaming about in an irresponsible manner and that D.W. 2 nominally conveyed the suit land in favour of the defendant with the intention of having it conveyed in favour of the second plaintiff when he settled down in life. The valuation given by the plaintiffs was also denied and the defendant averred that the suit property including the house was not worth more than Rs. 2,000. The s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... plaintiff estopped him from questioning the sale in favour of the defendant. 5. The defendant also contended that the suit was barred by limitation as no relief was claimed within three years from the date of the sale deed in favour of the defendant. The defendant averred that according to the plaint the plaintiffs have pleaded that Exhibit B-1 is a fraud committed on the pretext that the second plaintiff was living an irresponsible life. That being so, Exhibit B-1 is a voidable transaction according to law and the plaintiffs are not entitled to ignore it without setting aside such transaction. Moreover the second plaintiff is also a party to the said document and therefore he must claim proper relief to set aside the transaction and pay the court-fee on the value of the property. 6. On these pleadings the trial Court framed as many as nine issues. The first issue was as to whether the sale in favour of the 1st plaintiff was true, supported by consideration and valid. The second issue was with respect to the plaintiffs' possession of the suit land on the date of the suit and whether the plaintiffs' suit for a mere declaration was maintainable. Issue 3 was whether Exhibit B ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... th regard to possession of the plaintiffs and the maintainability of the suit for mere declaration does not arise for consideration as the plaint has been amended to include the relief of possession. The two material issues in regard to Exhibits B-1 being sham and nominal transaction and limitation, were decided against the plaintiffs. The trial Court held that though Exhibit B-1 was not supported by consideration, the sale deed is not a nominal and sham transaction. It applied Article 91 of the Limitation Act and held that as the suit has been filed three years after the date of the sale deed, it was barred by limitation. As regards Exhibits A-1 and A-2 it was held that the plaintiffs had not proved that those were executed by the defendant. With respect to possession, the trial Court's finding is that after the execution of Exhibit B-1 and for the period during which the second plaintiff was in the military service, the defendant alone was in possession. In this context the lower Court observed, that the evidence regarding possession of the land was conflicting and it could be taken that for two or three years after the execution of the Exhibit B-1, the second plaintiff was p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t was the subject-matter of attack by the plaintiff in the suit. The plaintiff alleged that the 1st defendant and his brother represented to her that the deed was a general power-of-attorney; that she did not read it nor was it read to her and that she executed it in the thought and belief that it was only a power-of-attorney. The deed of settlement was also attacked on the ground that it was executed by the plaintiff because of fraud and misrepresentation practiced on her by the 1st defendant and his brother. The relief claimed was that the settlement deed be set aside and a decree for possession and mesne profits be awarded. While considering the application of Article 91 of the limitation Act their Lordships observed that the answer to that question depended on the application of two principles, both well settled, that Article 91 did not apply when the instrument sought to be cancelled was void and inoperative and that where a person executes a deed of one character under misrepresentation that it is of a different character, it was void. In para. 3 the learned Judges say: This article presupposes that a suit is necessary under the law to set aside the instrument. But, where und ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... between a benami and a sham and nominal transaction, has been stated by the Supreme Court in Sree Meenakshi Mills Ltd., Madurai v. Commissioner of Income-tax, Madras, (1957) S.C.J. 1 : (1956) S.C.R. 691 : (1957) 1 An. W.R. (S.C.) 1 : (1957) 1 M.L.J. (S.C.) 1 : A.I.R. 1957 S.C. 49. Their Lordships of the Supreme Court observe in para. 30: the word 'benami' is used to denote two classes of transactions which differ from each other in their legal character and incidents. In one sense, it signifies a transaction which is real, as for example, when A sells properties to B but the sale deed mentions X as the purchaser. Here the sale itself is genuine, but the real purchaser is B, X being his benamidar. That is the class of transactions which is usually termed as benami. But, the word 'benami' is also occasionally used, perhaps not quite accurately, to refer to a sham transaction, as for example, when A purports to sell his property to B without intending that his title should cease or pass to B. The fundamental difference between these two classes of transactions is that whereas in the former there is an operative transfer resulting in the vesting of title in the transfer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xhibit B-1 is not supported by consideration. The trial Court has observed that the debts covered by Exhibits B-7 to B-10 amounted to Rs. 200 and in full discharge thereof not less than Rs. 300 or Rs. 350 might have been paid. But there was no evidence at all regarding how the remaining consideration of Rs. 1,600 and odd was spent by the second plaintiff. We do not agree with this finding of the learned Subordinate Judge as his approach is entirely wrong. The law does not cast any duty on the purchaser to prove as to how the consideration was spent or utilised by the vendor. It has only to be seen whether at the time of sale the consideration has passed or whether there was a promise to pay the consideration in future. In the present case the question of payment of consideration in future does not arise, because Exhibit B-1 categorically states that the amount of Rs. 2,000 was paid in cash to the second plaintiff before the execution of the sale deed. The defendant also has not taken the plea that though the sale deed mentioned the payment of consideration in cash, it was actually intended to be paid in future. What remains therefore to be seen is whether Rs. 2,000 were paid by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cond plaintiff. The question of the promises producing those documents does not arise as the promissory notes had been discharged. They could not be with the second plaintiff as the endorsements clearly show that those were handed over to the defendant as he had discharged the promissory notes. The contention of the learned Counsel for the appellants therefore cannot be accepted. P.W. 8 says that the endorsements Exhibit B-7(a), B-8(a), B-9 (a) and B-10(a) were in his handwriting but he did not see the second plaintiff signing the endorsements. It was D.W. 2 who asked him to write the endorsements and after D.W. 2, brought those endorsements with the signatures on them. P.W. 8, subscribed his name to those endorsements as the scribe. This statement of P.W. 8 does not in any manner disprove that those endorsements were signed by the second plaintiff. The second plaintiff of course has denied the signatures but his interested statement cannot be believed. We therefore hold that the endorsements, Exhibits B-2(a), B-7(a), B-8(a), B-9(a) and B-10(a) are true and the second plaintiff handed over the promissory notes Exhibits-B-2, B-7, B-8, B-9 and B-10 to the defendant after those were d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion. 23. Having held that Exhibit B-2, is with consideration, it is not necessary to-consider Tatia v. Babaji (1898) I.L.R. 22 Bom. 176, relied upon by the appellants' Counsel. 24. The next point for consideration is whether possession was given to the defendant on the execution of Exhibit B-1. The trial Court after review of the whole of the evidence has held: Regarding payments of cists, there must have been considerable bungling or mischief but one thing can be gathered i.e., for some time after the execution of Exhibit B-1, the second plaintiff alone paid cists, but subsequently the defendant began to pay the cists. 25. In para. 32 the trial Court has held that the evidence regarding possession of the land was conflicting and it can be taken that for two or three years after the execution of Exhibit B-1, the second plaintiff was paying taxes and subsequently the defendant. But while the second plaintiff was in the army, the defendant alone must have been in possession of the land. Possession changed hands on the date of Exhibit B-1 and only subsequently the disputes between the parties arose and there were rival claims regarding possession. But from any view point, it canno ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itness of Exhibits A-1, A-2 and B-1. If they wanted to rely upon his evidence, it was their duty to examine him. They cannot now take refuge in the statement of the defendant that he wanted to examine him and then file an application for his examination as a Court witness. Evidently the plaintiffs did not want to examine Apparao as they thought that his evidence may go against them. 27. In order to prove their possession, the plaintiffs relied on P.Ws. 5 and 12. P.W. 5 is a person who has been referred to in Exhibit A-2 as in possession of the suit land. The possession of P.W. 5 can be believed only if Exhibit A-2 is held to be genuine. As we will show later, Exhibit A-2 is not a genuine document and therefore the evidence of P.W. 5 cannot be considered in respect of the possession of the suit property. P.W. 12 is a lessee under Exhibit A-8. Much stress is laid upon the fact that this is a registered lease deed. Exhibit A-8 is dated 24th January, 1949 and it does not in anyway help in ascertaining as who was in possession at the date of execution of Exhibit B-1. Further, P.W. 12 is a timber merchant at Nandigama and also has a cinema house there in which the second plaintiff was em ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s kept with D.W. 2 when he was going to the military, cannot be believed when the second plaintiff in his evidence has stated that he had no trust in D.W. 2. 29. Now we turn to the case pleaded by the second plaintiff as to why Exhibit B-1 was brought into existence. The plaintiffs have stated in the plaint that D.W. 2 took the second plaintiff under protection, created feelings of enmity between him and the 1st plaintiff pretending that D.W. 2 was interested in the second plaintiff. D.W. 2 represented that the entire property possessed of the second plaintiff at that time, should be kept safe in the name of his son-in-law the defendant and that when the second plaintiff comes back from military service and settles down, D.W. 2, would perform his marriage and would get his property released to him. In the plaint it was also stated that the second plaintiff was leading an irresponsible life and was wasting the property. When the second plaintiff was in the witness box, he stated that before joining the military service, he had sold two acres of land and out of the consideration for that sale, he discharged some of his debts. He wasted Rs. 200 or so out of the balance of the consider ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tered deed in favour of the second plaintiff for the said land whenever the second plaintiff desires. The property mentioned in the said letter admeasures only three acres. The other document Exhibit A-2 is a letter written by the defendant to P.W. 5 on 19th July, 1946. It says that P.W. 5 had obtained three acres of land belonging to the second plaintiff on cowl for a period of three years and that he had paid Rs. 40 on the date of the execution of the letter to the second plaintiff towards menthe of Rs. 140. It further says that the balance of Rs. 100 may either be paid to the second plaintiff or the defendant. 31. The case of the plaintiffs is that Exhibit A-1 and A-2 were executed on the same day; but the 1st plaintiff as P.W. 2 has stated in his evidence that the second plaintiff was married 15 days after the date of Exhibit A-2. It is admitted by the plaintiffs that the second plaintiff was married on 6th March, 1949. That will put the date of the execution of Exhibit A-2 as on or about 18th February, 1949. This statement of P.W. 2 raises suspicion about the execution of not only Exhibit A-2 but Exhibit A-1 also. There are certain other circumstances by which the execution of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... agreed thereto. In the first instance Apparao asked for the conveyance itself; but the defendant refused to execute the conveyance. Apparao asked him to execute letters. But P.W. 7, the second plaintiff himself does not speak about any such conversation between Apparao and the defendant at the house of the scribe. According to him: The elders there said that the defendant might execute a letter in my favour and that he might execute a regular deed in my favour at the time of my marriage . P.W. 3 states that it was Bojja Chowdarayya (not examined) who stated what should be written in the documents Exhibits A-1 and A-2. P.W. 8 who is the scribe of Exhibits A-1 and A-2 says that the defendant told him what should be written. As per those instructions he prepared Exhibits A-1 and A-2. The Karnam i.e., Apparao was brought there while Exhibit A-1 was being written. The wording of Exhibit A-1 was the karnam's. The Karnam Apparao was not examined by the plaintiffs. The statements of the plaintiffs and their witnesses as to the date of execution of Exhibits A-1 and A-2; the authors of Exhibits A-1 and A-2 and the reason why only three acres of land were mentioned in Exhibit A-1, make t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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