Full Judgment Text
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IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO.4723 OF 2002
Arumaraj Devadhas … Appellant
Vs.
K.Sundaram Nadar (D) by LRs. & Ors. … Respondents
O R D E R
This appeal by special leave is filed by the third defendant in a
suit for declaration of title and possession, and consequential
permanent injunction (OS No.110/1979 on the file of Additional
District Munsiff, Kuzhithurai) filed by the first respondent herein (of
whom respondents 2 to 11 herein are the LRs.). Defendants 1,2,4 and
5 in the said suit are respectively respondent Nos.12,13,14 and 15
herein. Respondents 3,12,13 and 15 have been subsequently deleted
by the appellant at his own risk. For convenience, we will refer to the
parties by their ranks in the suit.
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2. The first defendant (Karunakaran Nadar) sold the suit property
(an extent of 14 cents in Survey No.1817 from out of several
properties allotted to him at a family partition) to the second
defendant (Solomon Nadar) under a registered Sale Deed dated
1.8.1946. The second defendant executed a Deed of Possessory
Mortgage dated 16.1.1947 in favour of one Syeed Kannu. Plaintiff
alleged that the said mortgage was not redeemed and Syeed Kannu
became the absolute owner thereof, and on his death the suit land was
inherited by his son Mohammed Ali. The said Mohammed Ali sold
the suit property to the plaintiff (Sundaram Nadar) under registered
Sale Deed dated 23.12.1978. Plaintiff, thus, claims to be the owner in
possession of the suit property. As the defendants were attempting to
interfere with his possession and raise a cloud over his title, he filed
the said suit.
3. Defendants 1 and 4 remained exparte. Defendant No.2 claimed
that he was not a necessary party to the suit. He however confirmed
that he had purchased the suit property from first defendant on
1.8.1946 and he had mortgaged the said land with possession in
favour of Syeed Kannu. The third defendant (the appellant herein)
contested the suit. He contended that the sale by the first defendant in
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favour of the second defendant on 1.8.1946 was sham and nominal.
According to him, first defendant sold 10 cents out of the said 14
cents in Survey No.1817 in favour of one Dasan Nadar under
registered Sale Deed dated 22.5.1953. Before such sale, the first
defendant also mortgaged the very same 14 cents of land in favour of
one Mohammed Haneefa on 16.2.1953. The said Muhammed Haneefa
assigned the mortgage in favour of the second defendant on
27.4.1964. The second defendant executed a Release Deed in favour
of Dasan Nadar in regard to 10 cents purchased by him, under Deed of
Release dated 1.8.1966 and thus Dasan Nadar became absolute owner
of 10 cents. Dasan Nadar had also purchased another 2 cents in
Survey No.1817 under Sale Deed dated 1.8.1966 executed by first
defendant and his wife Ammukutty. The said two cents of land
comprised a residential house where first defendant and Ammukutty
were staying and Dasan Nadar filed an eviction suit against them and
obtained possession of the said house under decree dated 21.9.1974.
The said Dasan Nadar thus became the owner in possession of 12
cents of land in Sy.No.1817 and he executed a Deed of Sale dated
22.8.1977 in favour of the third defendant and thus the third defendant
became the absolute owner in possession of 12 cents of land. The
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third defendant contended that as the Sale Deed dated 1.8.1946 in
favour of second defendant being sham and nominal was void, the
mortgage by second defendant in favour of Syeed Kannu and sale by
Syeed Kannu’s son in favour of plaintiff were also void and invalid.
The third defendant therefore sought dismissal of the suit.
4. The trial Court, by its judgment dated 23.8.1982 held that once
first defendant had sold the 14 cents of land in favour of second
defendant under Sale Deed dated 1.8.1946, the first defendant had no
right, title or other interest in the suit property and consequently the
several subsequent transactions relating to suit property by first
defendant, that is the mortgage dated 16.2.1953 in favour of
Muhammed Haneefa, the sale dated 22.5.1953 in favour of Dasan
Nadar as also another Sale dated 9.7.1955 in favour of one
Gopalakrishna Pillai were all ineffective and invalid. The Trial Court
held that plaintiff has established his title with reference to the said
sale dated 1.8.1946 in favour of second defendant, and thereafter
second defendant to Syeed Kannu and Syeed Kannu’s son to plaintiff.
It, therefore, decreed the suit as prayed. Feeling aggrieved, the third
defendant filed an appeal. The first appellate court allowed the appeal
by judgment dated 14.3.1984. It accepted the contention of the third
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defendant that the Sale Deed dated 1.8.1946 was sham and nominal
for three reasons which we will refer to a little later. As a consequence
of its finding that the Sale Deed dated 1.8.1946 by Karunakaran Nadar
(first defendant) in favour of Solomon (second defendant) was sham
and nominal, it held that the subsequent transfers from second
defendant to Syeed Kannu and Syeed Kannu’s son to plaintiff were
invalid. The first appellate court also held that the third defendant had
made out his title on the basis of the Sale Deed dated 22.5.1953
executed by first defendant in favour of Dasan Nadar in regard to 10
cents of land, and the Sale Deed dated 1.8.1966 executed by first
defendant and his wife in favour of Dasan Nadar in regard to two
cents and the consequential sale by Dasan Nadar in his favour on
22.8.1977. It, therefore, reversed the decree of the trial court and
dismissed the suit.
5. Feeling aggrieved, the plaintiff filed a second appeal. The High
Court allowed the second appeal. It found that the three reasons given
by the first appellate court to hold that the Sale Deed dated 1.8.1946
was sham and nominal were erroneous and the Sale Deed dated
1.8.1946 was valid and binding; and if so, the title of the plaintiff was
made out and the third defendant could not claim any title on the basis
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of documents executed by first defendant subsequent to the sale dated
1.8.1946. The Second Appeal was, therefore, allowed and the
judgment of the trial court was restored. The said judgment is under
challenge in this appeal.
6. The question that arises for our consideration is whether the
High Court was justified in reversing the finding of fact that the Sale
Deed dated 1.8.1946 executed by first defendant in favour of second
defendant was sham and nominal. This requires a brief examination of
the three reasons given by the first appellate court to hold the sale
deed dated 1.8.1946 to be sham and nominal.
Reason (i) : The first defendant had executed a Sale Deed dated
9.7.1955 in regard to the very same land in favour of one
Gopalakrishna Pillai. That sale was challenged by first defendant’s
minor son represented by his mother Ammukutty in O.S.No.701/1955.
In that suit Solomon Nadar (the second defendant) was arrayed as the
fourth defendant as he had been described as a mortgagee in the sale
deed dated 9.7.1955. The said suit was decreed ex-parte and in
execution of the said ex-parte decree possession of the property was
given to Ammukutty representing her minor son through a delivery
receipt. Therefore, it has to be inferred that second defendant was
never in possession in pursuance of the sale deed dated 1.8.1946.
The High Court has rightly explained how this finding is without any
basis and contrary to the facts. Firstly, in O.S.No.701/1955,
possession was not sought from second defendant. Possession was
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sought from Gopalakrishna Pillai. After the sale of the schedule
property and delivery of possession to second defendant under deed
dated 1.8.1946, obviously the question of Gopalakrishna Pillai having
possession of the said land did not arise. Further, even second
defendant did not continue to have possession, as he had mortgaged
the suit property with possession in favour of Syeed Kannu on
16.1.1946. Syeed Kannu was not a party to the said suit against
Gopalakrishna Pillai. The said defendant did not contest the suit.
Therefore, if paper possession was shown to have been taken from
Gopalakrishna Pillai in pursuance of an ex parte decree against him,
that cannot be said to be proof of second defendant not being put in
possession of the suit property under Sale Deed dated 1.8.1946.
Therefore, neither the suit filed by first defendant’s minor son against
Gopalakrishna Pillai, nor the delivery receipt executed therein would
in any way affect the title or possession of second defendant or his
transferee Syeed Kannu or the plaintiff who was the transferee from
Syeed Kannu’s son.
Reason (ii) : After execution of the Sale Deed dated 1.8.1946 in
favour of second defendant, first defendant had mortgaged the very
same land in favour of Muhammed Haneefa. Second defendant had
taken an assignment of the said mortgage from Muhammed Haneefa
under the Assignment Deed dated 27.4.1964. If the second defendant
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was already the owner in pursuance of the Sale Deed dated 1.8.1946,
there was no need for him to take the assignment of a subsequent
mortgage. Therefore it has to be inferred that the earlier Sale Deed
dated 1.8.1946 in favour of second defendant was treated by second
defendant as being sham and nominal and in view of it, the second
defendant took an assignment of the said mortgage on 27.4.1964.
But what was lost sight of by the first appellate court was the fact that
the Sale Deed dated 1.8.1946 in favour of second defendant related to
10 cents in Survey No.1865, 17 cents in Survey No.1817 and 12 cents
in Survey No.2142 and 10 cents in Survey No.1869. The Assignment
of Mortgage dated 27.4.1964, on the other hand, relates to as many as
sixteen properties. It is possible that second defendant was interested
in taking the assignment because of the mortgage was in respect of
several other properties. It is also possible that while mortgaging the
properties in favour of Muhammed Haneefa, first defendant had
inadvertently included the properties which were already sold under
deed dated 1.8.1946. It is also possible that second defendant did not
want any dispute or litigation with Muhammed Haneefa and therefore
took an assignment. What is relevant for our purpose is that the mere
fact that second defendant had taken an Assignment of the mortgage
from Haneefa, cannot be considered as a circumstance to hold that the
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Sale Deed dated 1.8.1946 in favour of second defendant was sham
and nominal.
Reason (iii) : The first defendant and his wife Ammukutty sold two
cents in Sy.No.1817 in favour of Dasan Nadar. He thereafter filed an
eviction suit against first defendant and Ammukutty and took
possession from them. This showed that first defendant did not deliver
possession to second defendant when he executed the sale deed dated
1.8.1946.
It is evident from the decree in O.S.No.251/1970 (Eviction Suit) that
the suit related to a house which was situated in two cents of land. On
the other hand, the suit property, that is 14 cents in Survey No.1817,
did not relate to any house property at all, but vacant land.
Sy.No.1817 was a large extent of land and what was sold by the first
defendant to second defendant under sale deed dated 1.8.1946 was
only a small portion of 14 cents. It was quite possible that first
defendant had continued to own and possess a house in some portion
of Survey No.1817 which was not the subject matter of the Sale Deed
dated 1.8.1946. Therefore, it is not possible to link the house sold in
favour of Dasan Nadar, with the land sold under the sale deed dated
1.8.1946.
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7. At all events, the fact that after executing the Sale Deed dated
1.8.1946 in favour of second defendant, first defendant went on
executing different Deeds namely a Mortgage Deed dated 16.2.1953,
Sale Deed dated 22.5.1953 and Sale Deed dated 9.7.1955 are not
indications that the first Sale Deed was sham and nominal, but were
indications that first defendant was an unreliable an unscrupulous
person. Further the fact that the second defendant had mortgaged the
suit property (purchased by him on 1.8.1946) with possession to
Syeed Kannu on 16.1.1947 shows that the deed dated 1.8.1946 was
not sham and nominal, but real and acted upon. The said sale has not
been declared as sham and nominal in any proceedings. In this
background, the inference that sale in favour of second defendant
under deed dated 1.8.1946 was sham and nominal, was unwarranted.
8. The High Court has focussed on the crucial issue and concluded
that the findings of the first appellate court that the Deed dated
1.8.1946 is sham and nominal, was an unwarranted inference without
any basis. Consequently, it rightly interfered with the said finding.
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We, therefore, find no reason to interfere with the judgment of the
High Court. Appeal is dismissed.
…………………………J.
(R V Raveendran)
New Delhi; ………………………..J.
April 16, 2009. (H.L.Dattu)