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Judgment
Venkatrama Sastry
The point that arises in this appeal is about the validity of a sale in pursuance of an earlier contract over an earlier sale executed in pursuance of a latter contract, where the latter sale was with the knowledge of the earlier contract of sale. It is necessary to state a few facts to appreciate the points arising in this appeal. The plaintiff, who filed in his suit for a declaration of his title to the suit property to an extent of Ac. 4-62 cents of land in Gudavalli village and for injunction in the alternative, has come up with this appeal. His case in brief, as per the plaint, is as follows: He purchased the suit schedule land from the second defendant on 11-6-1968 as per an earlier contract of sale dated 23-10-65 He was out in possession of the same. This land was purchased originally by a firm, which carried on partnership business for the manufacture of bricks in the suit land. The said firm consisted of the plaintiff, Koneru Raghavendra Rao and D. Koteswara Rao.
The first defendant, Who is a resident of Hyderabad, was previously cited as an arbitrator in the disputes between the plaintiff and his partners in the joint brick business. But the plaintiff was not agreeable to have him as the Arbitrator. But the first defendant in connivance with the other two partners began to take initiative as an arbitrator without any authority. But he was prevented from doing so by the plaintiff. Subsequently the matter was referred to two named arbitrators by the three partners. Even then they could not decide their disputes and the matter ended in a suit O. S. 87 of 1966 on the file of Sub-Court, Vijayawada. The first defendant, who bore a grudge on that account, in collusion with the other partners was trying to harass the plaintiff by getting into existence sham documents. He issued a false notice to the plaintiff, for which a proper reply was sent. Plaintiff also became the absolute owner of the bricks by purchase in court auction pending the suit for dissolution. In spite of it the first defendant began to gather persons and threaten to dispossess the plaintiff from the suit property. Plaintiff was therefore obliged to file a suit for a permanent injunction in the court of District Munsiff. Vijayawada and obtained a temporary injunction against him.
The sale deed dated 31st August, 1967, under which the first defendant claims to have purchased the suit property from the second defendant, was brought into existence by the defendants with the assistance of the other two partners, after the plaintiff issued a notice on 25th March, 1967 to the second defendant (vendor). It is a sham and nominal document and was never intended to transfer title. The various recitals therein are false. As the plaintiff is not a party to that document he is not bound to sue for its cancellation. The said sale was in contravention of the benefit or obligation arising out of the contract dated 21st October, 1965 to which the plaintiff is entitled. It was expressly stated in the subsequent agreement dated 27-2-1966 between the partners of which the first defendant had knowledge, that the right and title of the plaintiff alone prevails. After the exchange of notices the second defendant realised her obligation and executed a sale deed in favour of the plaintiff on 11-6-1963 having received the balance consideration as stated therein. The plaintiff is therefore absolved from the necessity of filing a suit for specific performance. As the first defendant was questioning the title of the plaintiff this suit is based upon title. He therefore prayed for a declaration that he has title to the suit property and wanted an injunction restraining the first defendant and his men from interfering with his peaceful possession and enjoyment of the suit property or for possession and for costs etc.
The first defendant contested the claim of the plaintiff in his written statement. He has disputed the purchase made by the plaintiff as a sham and nominal one and not supported by consideration. He disputed the plaintiff''s title and possession over the schedule land. He denied that he was asked to arbitrate the disputes between the partners. He was not aware of their disputes at all and never acted as an arbitrator. He never colluded with the other partners and on that account bore grudge against the plaintiff. He never brought into existence sham deeds with false recitals. He never tried to interfere with the possession of the plaintiff, as there was no need for him to do so, since he himself has been in lawful possession of the suit property. He purchased suit property on 31-8-1967 for Rs. 14,000/- in pursuance of a contract of sale dated 11-3-1967 in his favour by the second defendant and he has been in rightful possession and enjoyment of the same since then. Plaintiff was lawfully aware of this purchase when he (plaintiff) purchased the property on 11-6-1968. The plaintiff never questioned the first defendant''s title or possession. He never issued a notice to him (defendant) disputing his title or possession.
The contract dated 21-10-1965 was in favour of one K. Raghavendra Rao by the second defendant. The said contract was rescinded by mutual contract as Raghavendra Rao committed breath of contract and the property was brought to sale in execution of a mortgage decree. The said mortgage decree was satisfied from out of the consideration paid by the first defendant, in pursuance of his agreement of sale. The advance paid by Mr. K. Raghavendra Rao under his contract earlier was refunded to him. Hence the contract dated 21-10-65 was not in force on 11-6-1968 when the plaintiff fraudulently obtained sale deed for the plaint schedule property. The plaintiff cannot, therefore, acquire any title or possession under his sale deed 11-6 1968, since the vendor lost title by selling it to the first defendant. Hence she cannot convey again title to the plaintiff by the latter sale deed. The payment of land revenue by the plaintiff on 5-2-1963 is only a make-believe affair and not bonafide. This defendant is not aware of the notice dated 25-3-1963 said to have been issued by the plaintiff to the second defendant and his partners. It is absurd to allege that the first defendant''s sale deed is a sham and nominal one. The recitals therein are quite true. There was no agreement of sale by the second defendant in favour of the plaintiff. The plaintiff cannot claim to have any rights in the agreement in favour of K. Raghavendra Rao. By Executing the sale deed in favour of the first defendant, the second defendant must be deemed to have refused to perform that agreement. If so, it is Mr. K. Raghavendra Rao that should have filed a suit for specific performance of his contract impleading these defendants as parties. He has not done so as he knew that he himself committed breach of contract by failing to discharge the mortgage debt due by the second defendant. This defendant is not aware of the arbitration agreement dated 27-2-1966 nor is he aware of various registered notices. Having come to now that the second defendant has executed the sale deed in favour of the first defendant, the plaintiff has subsequently taken a sale deed from her. It is absurd to contend that he paid any consideration to her. The recitals in plaintiff''s sale deed are false and it is not supported by consideration. No title passed to the plaintiff under the sale deed. So the plaintiff is not entitled to sue for possession or injunction. He should first sue for the cancellation of the sale deed in favour of the first defendant before he can sue for any reliefs regarding the suit property. This defendant alone is in possession of the property. He therefore prayed that the suit may be dismissed.
When we come to the written statement of the second defendant, she has completely supported the sale deed in favour of the plaintiff and disputed the sale deed in favour of the first defendant. According to her the original contract in favour of Mr. K. Raghavendra Rao was for the benefit of the plaintiff also and as per the said agreement all the three entered into the suit land, removed the earth, prepared bricks and were carrying on business and enjoying the suit property keeping it in their possession. Subsequently disputes arose between them. Plaintiff gave a notice dated 25-3-1967 to this defendant (second defendant) and also to his other partners. By that time the suit for dissolution of the partnership was pending. As per the original contract dated 21-10-1965 the mortgage debt due by this defendant bad to be discharged by the purchasers. Raghavendra Rao was gaining time in discharging the said debt by stating that he was not having money and differences arose between the partners. Excluding the sum of Rs. 3,125/- paid at the time of contract date 21-10-1965, a sum of Rs. 6,000/- was received by this defendant on 25-2-1966 from the plaintiff though Mr. K. Raghavendra Rao told her that on settlement of account between them and after settlement of disputes they would pay the mortgage debt in a considerate way after finalising interest on the remaining amount and then they would get the sale deed executed in favour of one among them. As they did not settle their disputes soon and as the money with this defendant was spent away to some extent, this defendant had to make good by securing the same from others. The mortgage decree-holder Mr. Ramakotaiah in the meanwhile brought the suit property to sale in court auction. This defendant filed adjournment petitions depositing some amounts as the partners have not completed the sale. She received a notice from the plaintiff dated 25-3-1967. She informed about the notice to the two partners and they told her that they are no more bound by the agreement as disputes have arisen between the partners. After paying the sum of Rs. 6,000/- to this defendant, the said partners returned the agreement to her. Under such circumstances the plaintiff did not pay the balance consideration, as the accounts were not settled. This defendant, had therefore, to borrow money from others like Satyanarayana, Ramalakshmamma and Kutumba Rao, for discharging her other debts and for meeting her family expenses and to discharge the mortgage debt etc. The suit property was brought to sale by the court on 27-7-1967 and was actually sold. This defendant had to borrow money elsewhere and pay it in court in order to have the said sale set aside.
While so Mr. Raghavendra Rao and Koteswara Rao, the other two partners persuaded this defendant, posing themselves as her well-wishers by saying that the suit was pending in the Sub Court for settlement of accounts, that this defendant may lose the property by contracting debts in large sums, that no person other than the first defendant can fettle the accounts, that she should therefore execute a nominal sale deed in his favour, that they would be responsible if any litigation arises with regard thereto, that they would attest the said sale and they accordingly get executed a sale deed by this defendant on 31-8-1967 even before the court sale was cancelled. This defendant did not receive any consideration under the said sale deed. The alleged payment of Rs. 500/- before the Sub-Registrar by a third party was with an arrangement that it may be taken back by Raghavendra Rao. She has therefore not received even that sum. The existence of a prior agreement dated 11-3-1967 is denied. It is alleged that it was a fabricated document. The defendant came to know that it was subsequently connected with date 11-3-1967 and it is a forgery.
Plaintiff issued a notice dated 24-1-1968 to this defendant in reply to the notice of the first defendant dated 29-12-1967, to which a reply was sent by this defendant by stating that the sate deed dated 31-8-1967 was nominally executed by her, that he should seek advice from an advocate, after settling the matter through the mediation of the first defendant as suggested by the other partners and get the land divided. Thereupon the plaintiff issued another notice to her requesting to execute a sale deed by taking the balance sate consideration, She therefore received it and executed the sale deed on 11-6-68 for Rs. 14,000/-. It is a true one and the land has been in possession of the plaintiff. The plaintiff has also purchased the brick kilns therein in the auction held by the Sub-Court. There was no intention to pass title to the first defendant under the sale deed dated 31-8-1967 and that was not the purpose of this sale deed. The first defendant had therefore no right whatsoever in the suit property. This defendant was defrauded by the first defendant and Koneru Raghavendra Rao jointly with the intention of appropriating the suit property and they mis-represented the matters. Even the third partner Mr. Koteswara Rao issue J a notice stating that the sale deed dated 31-8-1967 is a nominal one and a benami transaction. Raghavendra Rao has not taken any action but colluded with the first defendant due to his grudge against the plaintiff and is trying to cause loss to the plaintiff and this defendant. The defendant is always ready willing to support the claim of the plaintiff over the suit property.
On the above pleadings the lower court framed nine issues. On behalf of the plaintiff he gave evidence as P. W. 1 and examined four other witnesses on his behalf besides marking Exs.-1 to A-42 on his behalf. The first defendant gave evidence as D W. 1 while the second defendant deposed as D.W. 2 supporting each their own cases. On behalf of the first defendant Exs. B-1 to B-26 were marked.
The lower Court on a consideration of the evidence came to the conclusion that the sale deed in favour of the first defendant was true and was fully supported by consideration. It also held that the sale deed in favour of the plaintiff was not supported by consideration, except to the extent of Rs. 147/-, out of Rs. 14,000/- paid before the Sub-Registrar. The lower court held that Ex. A-1 contract dated 21-10-1975 was not for the benefit of the firm, but was intended only for the benefit of Raghavendra Rao and that the plaintiff cannot claim any rights under the said contract nor is entitled to any obligation arising out of it. It also found that assuming that the plaintiff was entitled to any rights under Ex. A-1, there was breach committed by the partners including the plaintiff, and hence he is not entitled to any benefit arising out of Ex A-1 and have a sale deed in his favour. It therefore held that the sale deed Ex. A-26 executed in favour of the plaintiff is independent of the contract and that the plaintiff has therefore acquired no title and no interest in the suit land and he is not entitled to the declaration of title. Since the sale deed in favour of the first defendant is real and supported by consideration, the plaintiff cannot get any rights in the suit property. The main issues were therefore found in favour of the first defendant. On the question of possession also the lower court held it in favour of the first defendant. In the result the suit was dismissed.
In this appeal, preferred by the plaintiff, Mr. J.V. Suryanarayana Rao, the learned counsel appearing for the appellant plaintiff has taken me through the evidence, oral and documentary, and has made his elaborate submission in support of the appellant''s case. Similarly Mr Nori Rajeswara Rao, the learned counsel appearing for the contesting respondent (first defendant) has elaborately made his submission in support of his client''s case. Instead of repeating their arguments, I shall meet them as and when I discuss the case in further detail hereafter. Before doing so I would like to mention briefly the case as emerges from the documentary and oral evidence let in by the parties.
The suit property was purchased by the second defendant under Ex. A-29 dt. 25-3-1961 for a sum of Rs. 9,420/-. She mortgaged the said property to one P. Ramakotaiah for a sum of Rs. 5,000/-. On 4-5-1964 and on subsequent dates she agreed to sell the property under a contract of sale to one Katragada Radha Krishnaiah at the rate of Rs, 2,500/- per acre and received a total sum of Rs. 3,125/- towards consideration. She arranged for the discharge of the mortgage debt out of balance sate consideration. The vendee did not discharge the mortgage debt. As a result the mortgage filed the suit O. S. 92/65 on the file of Sub-Court, Vijayawada for recovery of the amount due under mortgage and obtained a decree Subsequently the agreement of sale in favour of Katragadda Radha Krishnaiah was cancelled and he was paid bark the sum of Rs. 3. 125/-, which the second defendant received under a fresh agreement executed by her in favour of Koneru Raghavendra Rao (one of the partners with the plaintiff in the brick business). It was stipulated in Ex. A-1 the fresh contract executed in favour of Koneru Raghavendra Rao on 21-10-1965 that the mortgage debt should he satisfied before 9-11-1965 by the vendee, who should then obtain a sale deed from her. If there is a default to pay the balance sale consideration within one year, on or before 21-10-1966 the advance would be forfeited and the agreement should stand cancelled. The possession of the land would be delivered to the vendee only at the time of registration. If the vendee were to act contrary to the agreement it would be open to the vendor to cancel the agreement and sell it to others without issue of any notice to the contractee. It may be noted that this contract of sale Ex. A-1 was prescribed by no other than the husband of the second defendant by name Maddali Adinarayana. This document bears the endorsement of payment of Rs. 6,000/- on 26-2-1966 signed by the second defendant. This endorsement reads that the amount belonging to the plaintiff was paid by Raghavendra Rao on that day to the second defendant. One of the points in controversy between the parties is whether this payment is true I shall consider this point in its appropriate contest. It is the case of the plaintiff that he borrowed a sum of Rs. 8. 000/- from one Venkatappayya under a promissory note Ex. A-2 executed jointly by himself and the other partner D. Koteswara Rao on 23-2-1966 in order to make this payment.
Subsequently the parties could not settle their differences and the matter was referred to the arbitration of two persons, one M. Adinarayana the husband of the second defendant and the other Chigurupati Krishna Rao. The agreement referring the disputes to arbitration is marked as Ex. A-3 dated 27-2-1966. It is signed by all the three partners, including the plaintiff. It is clear from the said agreement that the all three have been dealing in bricks, that Koteswara Rao has been managing the said business, that the licence was in the name of Raghavendra Rao and for the purpose of the said business they have purchased the present suit schedule land from the second defendant. It is no doubt true that the first defendant is not a party to this arbitration agreement. But the lower court had ignored this document in coming to the conclusion that Ex. A-1 was not for the benefit of the firm.
As the disputes between the partners were referred to the arbitration they did not make any further payment to the second defendant for the discharge of the mortgage decree debt, which was being executed by them in EP. 112/66 by the mortgagee-decree-holder. In order to avoid the sale, the second defendant went on depositing various amount on several occasions. On 20-3-1967 she deposited a sum of Rs, 1. 000/- into court as for Ex. B-25 and asked for part satisfaction being recorded. It was so recorded on 21-3-1967. It is the case of the second defendant that for this payment she utilised a portion of the sum of Rs. 6.000/- received by her from the plaintiff under Ex. A-1 on 25-2-1966, as per Ex. A-42 On 26-3-1967 she again deported a sum of Rs, 3.000/- into court and asked for part satisfaction being recorded and one month''s time being granted for payment of balance amount. She waived fresh proclamation of sale. Exs B-19 and 20 are the affidavit and the petition in this connection filed by her. The Court recorded part satisfaction on 29-3-1967 and adjourned the sale to 17-4-1967. On 20-4-1967 the second defendant again filed another affidavit and petition, marked as Fxs B-21 and 22, wherein she stated that she has already deposited Rs. 4,000/- on two prior occassions and that she was depositing Rs. 500/-. What is relevant in this connection is the affidavit filed by her is the following sentence :--
Under the present financial position, I am unable to pay the entire remaining debt due under this decree in one instalment. Besides this, the private sale consideration amount due to me by a third party has not been received so far. So, I am this day paying Rs. 500/- as part payment with great difficulty." If time of a month is to be granted for payment of the balance waiving fresh proclamamation.
This petition also was ordered and the sale was adjourned to 26-6-1967. It is the case of the second defendant that she borrowed the sum of Rs. 500/- or a promissory note executed by her, marked as Ex. B-17 on 19-4-1967, which she subsequently discharged. On 3-7-1967 the second defendant again deposited another sum of Rs. 500/- and filed another affidavit and the petition marked as Exs. B-23 and B-24. In that affidavit as well she stated that she has been making attempts to sell property belonging to her by private sale. Part satisfaction was recorded for Rs. 500/- and the sale was adjourned to 17-7-1967. According to the case of the second defendant she borrowed the sum of Rs. 500/- by another promissory note marked as Ex. B-18 dated 1-7-1967. The above documentary evidence shows that hectic efforts made by the second defendant in order to avoid or avert the court sale of her property. It is her case that she made the first two payments on 20-3-1967 and 26-3-1967 from out of the sum of Rs, 6000 received by her from the plaintiff on 25-2-1966 (vide A-42). Since she could not discharge the entire decretal debt the property was brought to sale and was actually sold in court auction on 17-7-1967. It was knocked down in favour of one G. Basava Sankaraiah for Rs. 8,200. The Second defendant thereafter borrowed a sum of Rs. 3,000 under a promissory note marked as Ex. A-28 dated 22-8-1967 and filed an application for setting aside the sale under Order 21 Rule 89 C. P. C. on 26-8-1967. The sale list is marked as Ex. A-24 and the application to set aside the sale under 21 Rule 89 is marked as Ex. A-5, Ex. A-25 shows that she has deposited Rs. 3072-50 into court for setting aside the sale. There was a further deposit of Rs. 81-50 made by her as per petition Ex. B-26 in full satisfaction of the decree. Ex. A-25 shows that the sale was ultimately set aside on 30-9-1967.
Even before the aforesaid sale was set aside the first defendant claims to have purchased this property from the 2nd defendant under Ex. B-2 dated 31-8-1967. The recitals in this sale deed show that he paid Rs. 3,125 as advance on 11-3-1967 when the contract in his favour executed (Ex B-1), that he paid Rs. 1,000 on 13-3-1967, Rs. 3,000 on 27-3-1967, 500 on 20-4-67 Rs. 500 on 3-7-1967, Rs. 4,074,80 on 26-8-1967, Rs. 1,300-50 on 29-6-1967 and Rs. 500 on 31-8-1967 at the time of registration of the sale deed paid not by him, but by a friend of his to the second defendant, Exs. B-1 and B-2, which are claimed by the first defendant as his trump cards are disputed by the plaintiff and the second defendant as normal and got-up documents. According to the second defendant the first defendant did not pay a pie out of sale consideration and all the dales were merely repeated by taking the dates of deposit made by her on various dates, it may also be noted in this connection that none of the payments alleged to have been made by the first defendant to the second defendant on dates subsequent to 11-3-1967 have been endorsed on Ex. B-1. There is no reason why Rs. 4,074.50 was paid on 26-8-1967 when the amount that had to be deposited was only Rs. 3,072.50. According to the second defendant they are all figures cooked up in order to show that there passed the consideration of Rs. 14,000 for the sale and she was not paid the sum of Rs, 500 alleged to have been paid before the Sub-Registrar, as the payment made at the time of registration was again taken back by Koneru Raghavendra Rao. The evidence shows that the first defendant could not have been present either at the time of Ex. B-1 or at the time of Ex. B-2. I shall discuss presently his evidence and as to how unnatural and improbable his conduct was in making this purchase.
On 25-3-1967 the plaintiff issued a notice to the second defendant and his two partners. It is marked as Ex. A-6. In this he definitely claimed that he is entitled to have the document in his favour as per the understanding between the partners in pursuance of the earlier contract dated 21-10-1965 in favour of Koneru Raghavendra Rao. He also asserted that he paid Rs. 1,200 out of the advance sum of Rs. 3,125 and a further sum of Rs. 6,000 on 25-2-1966. It is better to extract the portion of this notice because this is the first notice that emanated from the plaintiff after the execution of Ex. B-1, the so called agreement in favour of the first defendant by the second defendant. The said notice runs as follows.
My client further learns that No. 1 of you (second defendant) filed a petition in E.A. No. 153 of 1967 in the said E.P. for granting time for payment of the mortgage of the decree debt by a private sale of the land in question and she filed an affidavit to that effect in support of hat petition in order to put may client to loss. You cannot effect a sale in favour of any person other than the partners in the firm when their contract of sale is subsisting and any such sale if effected will no, bind my client. Yon are also hereby requested to inform the name and address and other particular of the person in whose favour a sale was intended to be made so that my client may get issued a proper notice to that person also. If you allow the correct sale be held it will be subject to the rights of the parties to the said agreement of sale dated 21-10-1965. Nos. 1 (second defendant and 2 (K. Raghavendra Rao) of you are hereby requested to send copies of he agreement dated 20-10-1965 to me or to my client My client hereby informed yon that he is willing and ready to obtain the sale-deed in his favour by adjustment of the amounts advanced by him to the firm without prejudice to his contentions in the suit O.S. No. 87 of 1966 on the file of the Sub-Court, Vijayawada and whom prejudice to his right to collect the other amount advanced by him as capital in the firm and the share of profit due to him in the business of the firm. Yon are therefore hereby given notice effect the sale of the land exclusively in favour of my client as it was already agreed mat the properties of the firm should be taken over by one of the partners; otherwise my client will be constrained to take necessary legal proceedings in the matter and you are liable for the costs thereof.
This notice was served on the other partner D. Koteswara as per Ex. A-7 acknowledgement. It was also served upon the second defendant as per it acknowledgement Ex. A-8. But there was no reply by both of them immediately to the plaintiff. It was not served on Koneru Raghavendra Rao as he left without instructions. There is evidence in this case that the first defendant was aware of this notice Ex. A-6 and the earlier contract Ex. A-1 before be took the sale deed Ex. B-2 on 31-8-1967.
In the suit for dissolution of partnership, the original arbitrators were appointed as receivers, but on 17-5-1967 an advocate by name Y. Madhava Rao was appointed as a receiver. In the auction of the bricks conducted by the said receiver on 10-3-1968 the plaintiff became the highest bidder for Rs. 9,000 and odd and he was allowed to remove bricks from the suit land as per receipt dated 16-3-1968. There is also evidence in the case that the plaintiff paid the taxes payable to the Government on the suit land on 5-2-1968 as for receipt Ex. A-12.
For the first time the first defendant asserted any rights as per his purchase under Ex. B-2, was on 29-12-1967 by issue of a notice Ex. A-13 to the two receivers appointed by the Court. He asked the receivers to remove the bricks from the suit land in order to enable him to pursue his agricultural operations. He indicated therein that he purchased the land for Rs. 14,000 on 31-8-1967 from the second defendant and was put in possession of the same. He also alleged that the said purchase by him was known to the plaintiff and the defendants 1 and 2 in the suit for dissolution, O. S. 87/66. It may be noted that the plaintiff in the said suit was no other than Mr. K. Raghavendra Rao, while the defendants 1 and 2 there in were Mr. D. Koteswara Rao and the present plaintiff Copies of this notice were sent to the three partners, including the plaintiff. The immediate reaction of the plaintiff to this notice was a notice of protest dated 24-1-1964 marked as Ex. A-14. He stated in that notice issued to the lawyer for the first defendant that the purchase by the first defendant was false, that he was (first defendants was not in possession, that the plaintiff had no knowledge of such a purchase, that the land has been possession of the present plaintiff under the terms of agreement of sale and that subsequently the arbitration receivers came into possession of bricks under the orders of the court. It was also asserted therein that the first defendant was aware of all these acts and also the agreement of sale and the understanding between the partners that the land should be given to the present plaintiff after adjustment of accounts. Reference was also made to the earlier notice Ex. A-6 issued by the plaintiff to the second defendant herein and it was stated that any alienation made by her would not bind the present plaintiff as it is a nominal and sham one. It is also alleged that the said sale deed was brought into existence at the instance of Koneru Raghavendra Rao, with horn the present first defendant was closely connected and whose mediation the plaintiff had previously refused Ex. A-15 is the acknowledgement for this notice sent by the first defendant''s lawyer.
On the same day, the plaintiff also got issued a notice to the second defendant, marked as Ex. A-16, asserting that Ex. B2 is a nominal document and called upon the second defendant to execute the document in terms of the earlier contract Ex. A-1 in his favour. Ex. A-17 is the acknowledgement for this notice by the second defendant.
Ex. A-18 is the reply to this notice by the lawyer for the second defendant to the plaintiff''s lawyer. It was stated therein that as the contractees did not furnish her funds, she had to borrow elsewhere amounts to make payments towards the mortgage decree debt in instalment. After receipt of the notice Ex. A-6, she sent word to the other two partners. They stated that as differences arose between them, they were not in favour of having a document and hence they gave up the agreement so far as they were concerned. Subsequently she sent for the plaintiff also, who did not run up. At that stage D. Koteswara Rao and Raghavendra Rao jointly requested her for getting the deed registered in the name of the first defendant herein, who was their mediator previously and then the deed dated 31-8-1967 was got written assuring her that they would be liable for anything to come in that regard. Ultimately it was stated in that notice as follows :--
Therefore, your client has to settle the disputes though the said Rangarao in the manner stated by his partners and decide to whom that land has to pass. My client has nothing to do with the investment disputes between your client and his partners. Therefore, you are called upon to settle the disputes within four days of receipt of this reply and get it registered through the rights possessed by you, failing which the agreement dated 21-10-1965 shall be invalid (cancelled) so far as your client is concerned and subsequently my client shall take necessary actions.
The above attitude of the 2nd defendant clearly shows that the sale deed dt. 31-8-1967 in favour of the first defendant was only nominal. It also indicates that the earlier agreement dated 21-10-1965 was still in force and it would be cancelled in future, if the plaintiff has not or is not going to settle the disputes with his partners. It may be noted that this notice was given by the second defendant long before the present suit was filed.
The reply to this latter by the plaintiff was dated 28-2-1968 marked as Ex. A-19 He says in that letter that there was an arrangement that the land should be sold only to him. He questioned the sale deed in favour of the first defendant He says that he had no interest or liability at all to settle the disputes through Mr. Ranga Rao (first defendant) as advised by the partners and the second defendant cannot insist him to do so. He called upon the second defendant to receive the balance sale consideration excluding the sale consideration already paid to her up to mat date and execute a registered sale deed in his favour within two days of receipt of that notice. It was also made clear that the other two partners had no right whatsoever to that land and that in case proper sale is not executed in that manner as per the rights possessed by him be would be forced to take necessary action. It is also averred that he was ready with the necessary money required for the stamp papers for the deed and for the registration.
It was subsequent to this notice that the second defendant executed a sale deed in favour of the plaintiff on 11-6-1968 marked as Ex. A-26. The balance sale consideration was paid by the plaintiff by discharging the two prommissory notes dated 15-4-1967 (Ex. A-27) executed by second defendant in favour of P.W. 2, discharged as per the endorsement Ex. A-31 and also the other promissory note Ex. A-28 dated 22-8-1967 executed by the second defendant in favour of P.W. 3, when she borrowed money for making deposit under Order 21 Rule 89 C.P.C. in the mortgage decree execution proceedings. As per endorsement Ex. A-32 on this promissory note Rs. 3,263/- were paid by the plaintiff under the earlier prommissory note Ex. A-27 the plaintiff paid a sum of Rs. 3,390/-. Adding these two sums along with the advance of Rs. 1,200/- and the sum of Rs. 6,000/- paid on 25-2-1964 (Ex. A-42 endorsement on Ex. A-1) the balance sum of Rs. 147/- was paid before the Sub-Registrar at the time of registration of the sale deed.
On 20-7-1968 D. Koteswara Rao, the other partner, issued a notice to Defendants 1 and 2 and the plaintiff, which is marked as Ex. A-35. What is curious about this notice is that he as well assert in that notice that the contract Ex. A-1 was on behalf of the partnership firm, though taken by Konery Raghavendra Rao in his name. He disputed the two sale deeds Exs. B-2 as well as Ex. A-26 executed by the second defendant as benami and not binding on his interests. It was further alleged as follows :--
The contract originally No. 1 (present second defendant) entered with Konery Raghavendra Rao is still in force and is in existence and it was also confirmed in other proceedings i. e., in a court auction on 28-7-1967 where my client paid the entire sale warrant amount for the J. D. R. Madupalli Narasamamba recognising his right of interest in the lands stated supra and also my client denies herewith all the contents of the registered letter dated 29-12-1967 issued by No. 1.
It is therefore clear from this notice that there is an admission by him that Ex. A-1 contract was for the benefit of all the three partners and it was still in force. The question whether the two sales in favour of the plaintiff and the first defendant are true and genuine is a different matter. D. Koteswara Rao was trying to enforce his rights under Ex. A-1 even on 28-7-1968 and this was the reply given by him to Ex. A-13, issued by the first defendant who asserted rights under Ex. B-2. This notice is also important in this respect viz., that he was disputing Ex. B-2 as a benami transaction.
We have got no other evidence in the case to show that D. Koteswara Rao has paid any amount in execution in pursuance of the said contract. He has not taken any further steps to pursue his rights under such contract if any. He has not appeared as a witness nor has he established his case. This case is helpful to the plaintiff in this way viz., in establishing that Ex. A-1 contract was for the benefit of all the three partners though it was entered into by Raghavendra Rao alone and that it was inforce. It is also helpful to him in asserting in the same manner as the second defendant is doing it viz., that the sale deed in favour of the first defendant Ex. B-2 was a nominal document.
The reply to Ex. A-35 letter by the plaintiff is marked as Ex. A-36 dated 1-8-1968. He has stated therein that both D. Koteswara Rao and K. Raghavendra Rao, both gave up their rights under Ex. A-1 and that the sale deed in his favour in pursuance of Ex. A-1 dated 11-6-1968 (Ex. A-26) by the second defendant is not benami, but a real one fully supported by consideration. It is also asserted that the entire mortgage decree debt was paid by the second defendant by instalments. There was no reply, to this notice given either by D. Koteswara Rao or K. Raghavendra Rao nor has Raghavendra Rao appeared in this case as a witness to support the case of the first defendant. It may be noted that he and D. Koteswara Rao both attested the sale deed Ex. B-2 executed in favor of the first defendant by the second defendant. It is the case of the second defendant that they were responsible in bringing into existence a sale deed in favour of the first defendant. They have not supported him by letting in any evidence in this suit. On the other hand the notice Ex. A-35 issued by D. Koteswara Rao one of the attesters and supporters of the first defendant completely demelishes the case of the first defendant.
We have to see in the aforesaid background which of the two sale deeds viz., Exs. B-2 and A-26 are real and genuine, before considering that question it is better I refer to the admissions made by the first defendant relating to this document Ex B-2. It is admitted by him in the cross examination by the second defendant that he had no land at Cuddevally and had no house there, that he casually approached second defendant at Machivaram, that he does not know the scribe of Rs. B-1, that he did not stipulate any particular time for execution of the sale deed, that the contract stipulates a time of two months, but is was not meant to be the essence of the contract and that he did not discharge the mortgage debt within that time, but he says that he discharged the mortgage debt by instalment payments. If we have any regard to all the court proceedings wherein the second defendant paid various amounts with petitions asking for adjournments of the sale, one cannot understand what this witness mean by saying that he discharged the mortgage debt by instalments. The mortgage in fact was not paid in person, but all amounts were paid into court.
He says that the second defendant promised to get the mortgage deed duly cancelled from the court. It shows that he was not even aware of the suit that was filed on the basis of the mortgage bond. He says that he paid the amount to the second defendant to be paid into court, and yet he did not take any receipt for each payment. There is a recital in Ex. B-2 that the second defendant should handover the mortgage deed to him As to how it could be done, it passes one''s comprehension then the suit was filed on the basis of the mortgage and the decree was fully satisfied in court.
As regards his capacity, he says that he has drawn some money from Panduranga Construction Company, in which he was the Managing partner. But no such accounts have been filed. He admits that he had a personal bank account also, from which he has not drawn any amount to pay to the second defendant. It is therefore all the more necessary for him to have adduced evidence to show that on the various dates, when he is alleged to have made payments to the second defendant, he had drawn moneys from M/s Panduranga Construction Company. No such evidence has been placed before the court. He has not taken a separate receipt for each payment from the second defendant, which is rather unusual and extraordinary. It may be noted that none of the payments were endorced on Ex. B-1. Another important admission made by this witness, which shows that he was absolutely ignorant about these matters, is the following :--
Ex. B-1 was after the court sale.
It may be noted that Ex. B-1 is dated 11-3-1967, whereas the court sale was on 17-7-1967. It therefore shows that this witness had no knowledge about court proceedings and as to when the contract in his favour was executed. If really the contract was executed after the court sale, there is no question of the various amounts having been made to the second defendant prior to the court sale as recited in Ex. B-2. This admission clearly destroys the case about the passing of consideration under Exs. B-1 and B-2. He says that second defendant applied for setting aside the sale and that it was set aside. But he does not remember the date of the court sale. I have already mentioned that the court sale was set aside on 30-9-1967 and the sale deed Ex. B-2 was executed even on 31-8-1967, i. e., even before the court sale was set aside It would not be the ordinary and natural conduct of a bonafide purchaser to take a sale deed even before the sale was set aside by the court, for ought as know, the sale may not ultimately be set aside for various reasons. The various admissions made by the first defendant it his cross examination by the second defendant''s counsel exhibit the inexorable ignorance of this person about the two documents Exs. B-1 and B-2.
We then come to the cross-examination by the plaintiff. He admitted that he was aware of the contract Ex. A-1 before Ex. B-1 when Raghavendra Rao admitted before him that it was cancelled. If so he should have insisted upon something in writing from Raghavendra Rao that Ex. A-1 was cancelled. He did not do so. This admission further goes to show that he has purchased this property with full knowledge of a prior agreement of sale, which was still in force and about whose cancellation there was no reliable evidence to his satisfaction. It is also clear from the admissions of this witness that Koneru Raghavendra Rao told him about receipt of notice Ex. A-6 by him. He took a copy of it from the advocate, who issued it, as K. Raghavendra Rao told that he misplaced the original of the notice. It may be noted that Ex. A-6 was not served on K. Raghavendra Rao as he left without instructions. This admission on the part of the first defendant clearly shows that all the parties were moving together and were fully aware of all the events that were taking place. As regards the payment to K. Raghavendra Rao of the sum of Rs 3,125/- he says that he paid it to second defendant, who paid it to him (Raghavendra Rao). But no receipt is forthcoming. As regards the payment of Rs. 500/- before the Sub-Registrar, he says that he got it paid through his friend one N.V.S. Narayana Murthy, because his hand was lucky. Where is the question of the last payment being made through a lucky hand, when he is alleged to have made a major portion of the consideration not through a lucky hand. He admits that he has visited the suit land and found brick kilns, that he was not aware of the Civil and Criminal cases and his denial that he was a mediator has to be merely disbelieved. The lower court held that he was chosen as a mediator by K. Raghavendra Rao and D. Koteswara Rao and that it was not accepted by the plaintiff. The lower court also held that there does not appear to be any truth in what the first defendant says that he was not in any way associated with Raghavendra Rao and Koteswara Rao and he was totally ignorant of their partnership business. He did not ask the second defendant to deliver her title deeds. He has not taken back Ex. A-1. In regard to Ex. A-35 notice issued by D. Koteswara Rao attacking his sale deed Ex. B-2 as nominal, he says that there was no need for him to reply to it. As regards the payments to second defendant, he has not taken any receipts from her, nor were they endorsed on Ex. B-2. As regards the stamp paper for Ex. B-1 he says that he has taken it from one Rahman and he does not know when he (Rahman) purchased it. The stamp used for Ex. B-1 stands in the name of one K. Sitaramaiah, who is said to be the father of Koneru Raghavendra Rao. The first defendant is, therefore not even aware of that.
From a reading of the evidence of first defendant is thus clear that the first defendant was no more than a name-lender in the entire transaction and that there is no clear proof that Exs. B-1 and B-2 are documents taken by him as a bonafide purchaser for value. No enquiries were made by him and there is no proof about his capacity to secure the purchase money. If really he had paid this amount on the respective dates to the second defendant he would be the last person to pay those sums without obtaining any receipts or endorsements. The fact that he had not taken any prior title-deeds nor made any enquiry, nor asked for the return of Ex. A-1 after cancellation shows that he was not a bonafide purchaser. If really his purchase was true, he would not have allowed the property to be brought to court sale several times and exposed it to the risk of being purchased by a stranger. He does not know when the sale was set aside and yet he purported to take a sale deed on 31-8-1967 even before the sale was actually set aside.
The second defendant has denied receipt of any consideration under Ex. B-1 and B-2 and she asserts that both of them are nominal documents.
The other two partners, who are instrumental in bringing into existence these two documents by the second defendant and who have attested Ex. B-2 (and one of them attested Ex. B-1) have not come into the witness box to support him or his case. The recttals in Ex. B-2 about passing of consideration seems to have been borrowed from the court records, when several payments were made by the second defendant to avert the court sale. It cannot also be believed that the sum of Rs. 500/- which was shown to have been paid before the Sub Registrar to the second defendant, was allowed to be retained by the second defendant. This second defendant asserts that the amount was taken back by K. Raghavendra Rao. The first defendant has not examined the person through whom the said money was paid to the second defendant to disprove her case that the amount was taken back.
The lower court has also found that the first defendant was the arbitrator chosen by the other two partners and that was not approved by the plaintiff. He therefore bore grudge against the plaintiff and hence gave his helping hand to the other two partners in bringing into existence the two nominal documents to defeat the claim of the plaintiff. The oral evidence of the plaintiff and second defendant appears to be more reliable in the circumstances.
In view of the above clear admissions by the first defendant himself in his evidence, taken in contrinction with the other oral and documentary evidence, referred to above, I have no hesitation to hold that Exs. B-1 and B-2 are purely nominal documents brought into existence by the other two partners of the plaintiff with a view to defeat the rights of the plaintiff under the earlier contract of sale Ex. A-1 which was not cancelled by the plaintiff. The first defendant purchased the said property admittedly with full knowledge of the earlier contract of sale Ex. A-1 executed in favour of K. Raghavendra Rao, which was taken for the benefit of all the three partners. In Ex. A-35 there is a clear admission by one of the partners that it was intended for the benefit of all the three. We have a similar admission Ex. A-5 as well. The two other partners have not gone into the witness box to deny any such case. The documents or papers relating to the suit for dissolution filed by the partners have not been placed before the court to show the attitude adopted by these partners in the said suit. It should, therefore, be held that the first defendant, even assuming for a moment that the plaintiff had a subsisting right under the earlier agreement of sale Ex. A-1 which could still be enforced by the plaintiff as against the second defendant.
As regards the purchase by the plaintiff and the payment of consideration there is enough reliable evidence on record to show that the plaintiff paid Rs. 1,200/- at the time of agreement. On 25-2-1966 he paid a sum of Rs. 6,000/- through K. Raghavendra Rao, which is endorsed on Ex. A-1. The second defendant admitted receipt of the said amount, K. Raghavendra Rao has not appeared in the witness box to dispute that sum. The plaintiff has also paid the amounts due under the two promissory notes Exs. A-27 and A-28 and the two creditors have been examined as P.Ws. 2 and 3. Their cross-examination does not show that they had no capacity to lend such large amounts. The only suggestion, that they joined hands with the plaintiff to bring into existence these documents was denied and it cannot have any value. The second defendant has admitted receipt of these amounts under the sale deed Ex. A. 26. The balance of the amount was paid before the Sub Registrar, I have therefore no hesitation in believing the plaintiff''s evidence and in disagreeing with the finding of the lower court about the passing of consideration under Ex. A 26 to the second defendant, I do not see any valid reasons why the evidence of P. Ws. should not be believed.
The lower court held that there was a breach on the part of partners under Ex A.1. It is not the case of any party to the suit. The second defendant has not tried to rescind the contract on that account. On the other hand she tried her best to salvage her property by borrowing moneys from others in order to avoid court sale. One of the promissory note debts (Ex. A. 28) was ultimately discharged by the plaintiff. I do not therefore see any substance in the objection that there was a breach on the part of the plaintiff in regard to the first contract. The further finding of the learned Judge that the plaintiff cannot claim any rights under the contract Ex. A-1 cannot also be sustained. I have already held that on the evidence in the case, it should be held that the contract was for the benefit of all the three partners and that the plaintiff can enforce the same.
Mr. Nori Rajeswara Rao, the learned counsel appearing for the contesting first defendant argued that the contract was in favour of K. Raghavendra Rao and the plaintiff who is a third party cannot take advantage of it. In support of this argument he placed reliance upon the decision of the Supreme Court in M.C. Chacko Vs. The State Bank of Travancore, Trivandrum, But in view of my finding that the contract was for the benefit of the firm, each partner is entitled to a right therein. Hence this point has no substance.
The other submission made by the learned counsel that the plaintiff cannot let in evidence to show that the contract was for his benefit also is equally ineffective. When once the contract was found to be in favour of one of the partners of the firm and for the benefit of the firm each partner is entitled to have equal rights in the said contract according to law. The learned counsel then argued that K. Raghavendra Rao has relinquished his rights in Ex. A-1 and hence Ex. A-1 was not in force. But it should be noted that after the suit for dissolution was filed any one partner does not have authority to give up rights in the properties of the partnership to the prejudice of other partners. So long as there is no relinquishment by the plaintiff, he still can assert rights under the suit contract. In the above view I hold that the plaintiff has title to the plaint schedule property and that the first defendant purchased it on 31-8-1967 under a sham and nominal document (Ex. B-2).
There now remains the contention raised by the learned counsel as to the right of the plaintiff to obtain any relief in this suit, when once the second defendant had parted with her title in favour of the first defendant. On my finding that the sale deed Ex. B-2 is sham and nominal, on title was intended to pass to the first defendant by the second defendant. Hence there cannot be any hurdle for the second defendant to execute the saler deed in favour of the plaintiff in pursuance of the earlier contract Ex. A-1 But, assuming for a moment that the sale by the second defendant to the first defendant transferred title to the first defendant, what are the rights of the plaintiff in the plaintiff in the property when the first defendant has purchased it with full knowledge of the earlier agreement of sale Ex. A-1 which was still in force ?
Mr. J.V. Suryanarayana Rao, learned counsel for the appellant-plaintiff relied upon some decisions and contended that because the first defendant was aware of the earlier contract of sale, he held the property in trust for the plaintiff and hence the plaintiff''s title can be declared in the suit and he can be given the necessary reliefs The learned counsel relied upon the decision in Gaffor v. Bhikaji ILR 26 Bom 159 decided by their Lordships L.H. Jenkins C.J, and Chandavarkar J., wherein the first defendant entered into an agreement to sell certain land to the plaintiff on 25-6-1895, but on 19th December, 1895 he sold the said land to the second defendant by a registered sale deed. In 1896 the plaintiff sued the 1st defendant for the specific performance of his agreement and obtained a decree dt. 8-3-1897. In pursuance of the decree, the court executed a sale deed in favour of the plaintiff. He then tried to take possession, but was resisted by the second defendant. Hence a second suit was filed for possession. It was found in that suit that the second defendant in the earlier suit purchased it in December, 1895 with notice of the earlier agreement of the plaintiff in June, 1895. It was held by their Lordships in those circumstances that the plaintiff was entitled to possession, that the second defendant having bought with notice of the plaintiff''s contract, he held the property for the benefit of the plaintiff to the extent necessary to give affect to that contract. Their Lordships also directed that the decree should be drafted in the following words, "There should be a declaration that the second defendant holds the property for the benefit of the plaintiff to the extent necessary to give effect to the contract of the 25th June, 1895; there should be a decree that the second defendant to execute to the plaintiff a proper conveyance of the Thikan; and a decree for possession".
The aforesaid decree was passed because in the earlier suit for specific performance the subsequent the subsequent purchaser was not made a party to that suit In Lala Durga Prasad and Another Vs. Lala Deep Chand and Others, their lordships of the Supreme Court have indicated that there is a purchase of the property by a registered deed by a person having knowledge of the earlier contract of sale, in a suit at the instance of the earlier contracted the court should direct the vendor as well as the purchaser to joint in the sate deed so as to pass full title to the earlier contractee. The purchaser joins in not pissing the covenant, but only in passing the title. In Soni Lalji Jetha and Others Vs. Soni Kalidas Devchand and Others, the previous decision in Gaffar v. Bhikali was approved. In that case the decree for specific performance did in act provide that all the defendants in to it suit should sign the deed of conveyance, but by some misconception the subsequent purchaser was not made to join in the conveyance, but was made to attest the document. Their Lordships held that it would not make any difference Their Lordships referred to paragraph 2 of section 48 of the Transfer of Property Act and held that where a third person is entitled to the benefit of an obligation arising out of contract and annexed to the ownership of immovable property, but not amounting to an interest therein such a right or obligation may be enforced against a transferee of the property affected thereby, but not against a transferee for consideration and without notice of the right or obligation nor against such property in his hands. It was therefore held that a transferee with notice is bound by such obligation, though the contract under Sec. 54 does not create any equitable estate in the immovable property. It was held by their lordships that it does create an obligation, which is recognised by section 3 of the Specific Relief Act 1887 and Sec. 91 of the Indian Trusts Act 1883, Hence person who purchased the property with notice is bound by such obligation though the contract u/s 54 does not create any equitable estate in the immovable property. It was held by their Lordships that it does not create on obligation, which is recognised by section 3 of the Specific Relief Act 1887 and section 91 of the Indian Trusts Act 1887 and section 91 of the Indian Trusts Act 1883. Hence a person who purchased the property with notice that another person has entered into a contract, affecting that property, he must hold that property for the benefit of the latter to the extent necessary to give effect to the contract.
In Chand Mohammad v. Murtuzakhan ILR 26 Bombay 159 the owner of a house first agreed to sell it to (A). But (B) having notice of that agreement persueded the owner to sell it to him. On intimation of this sale (A) again obtained a sale deed in his favour. It was held by His Lordship J. C. Shah J. that (A) was entitled to the benefit of obligation arising out of the contract which by the agreement of sale became annexed to the ownership of the house by virtue of section 40 of the Transfer of Property Act, It could in law be enforced against (B), who was transferee with, notice thereof and that earlier sale to (B) does not confer upon him an indefeasible title to the house. It was also further held by the learned Judge that A was absolved from the necessity of filing a suit for specific performance With respect I agree with the said decision.
Section 40, clause 2 of the Transfer of Property Act is in the following terms :
Where a third person is entitled to the benefit of an obligation arising out of contract, and annexed to the ownership of immovable property, but not amounting to an interest therein or easement, thereon, such right or obligation may be enforced against a transferee with notice thereof or a gratuitous transferee of the property affected thereby but cot against a transferee for consideration and without notice of the right or obligation nor against such property in his hands.
Though no doubt section 54 of the T.P. Act, does not create any right or interest in the property, it does create an obligation. An obligation has been defined in section 9 of the Specific Relief Act as including every duty enforceable by law. Section 91 of the Trusts Act runs as follows :--
Where a person acquires property with notice that another person has entered into an existing contract affecting that property, of which specific performance could be enforced, the former must hold the property for the benefit of the latter to the extent necessary to give effect the contract.
Though this section speaks of specific performance being enforced against the purchaser with notice, it also says that such purchaser holds the property for the benefit of the original contractee to the extent necessary to give effect to the contract. This expression does not mean, in my opinion, that the effect of the contract can be given only by means of a suit for specific performance. If in pursuance of such a contract, the vendor executes a sale deed, which he is bound to do under the terms of the contract, in discharge of the obligation arising under that contract on him, the subsequent purchaser must hold the property for the benefit of the person, whose purchase of property under an earlier contract was even by a private sale. If it is to be hold that the benefit of section 91 of the Indian Trusts Act accrues only to a person who sues for specific performance and not to a person who obtains a sale deed by a private negotiation in pursuance of an earlier existing and enforceable contractor sale, then we would be making the provisions of section 40 of the Transfer of Property Act and S. 91 of the Indian Trusts Act, notice and unavailing to such a purchaser. It could not have been the intention of the framers of these two Acts that the contract should be enforced only in a court of law and not by mutual agreement. I am, therefore, of opinion, agreeing with the view expressed by the learned Judge in Chand Mohammad v. Murtulaknai AIR 1958 (Bom.) 1941 that the plaintiff who has obtained the sale deed in pursuance of an earlier, existing and enforceable agreement of sale Ex. A. 1 is entitled to have his superior title declared in this suit as against the first defendant, who should hold the property only for the benefit of the plaintiff in order to give effect to such a contract, which has now merged in the sale deed Ex. A. 26. The plaintiff in this suit has asked for a declaration of his rights and for possession. If necessary in order to do full justice to the plaintiff a clause in the same terms as imposed by the Bombay High Court in Gaffur v. Ibrahim I.L.R 26 Bom. 159 could also be inserted. But in my opinion even that is not necessary, because when once the plaintiff''s title is declared as the owner of the suit property and the first defendant is directed to deliver possession of the suit property as prayed for to the plaintiff, that gives an effective relief to him in the suit itself.
As regards possession, there is evidence on record to show that the plaintiff was in possession As a matter of fact the first defendant in his evidence admitted that when he enquired about the land, he as told that the plaintiff was in possession in pursuance of an earlier agreement of sale. Subsequently the suit for dissolution was filed and the possession went into the hands of court receiver. The plaintiff purchased the bricks from the court receiver and continued to deal with the bricks. It is no doubt true in the suit for injunction filed in the court of the District Munsif, Vijayawada by the plaintiff the court directed the first defendant to deposit Rs. 300/- towards the value of the standing crop and then cut and remove the same. That would not give him a right to hold possession of the land He was in possession only under the directions of the court. The suit was originally laid for injunction, but was subsequently converted into one for possession. It is not, therefore material to find as to who was in actual possession. As stated already there is sufficient evidence to show that after the agreement of sale Ex. A-1, the purchasers thereunder entered into possession of the property, began to dig up earth and manufacture bricks therein. That is sufficient to hold them to be in possession. In any event possession is decreed to the plaintiff on the ground that the Munsif Court has directed the first defendant to hold possession of the property under certain directions.
The future mesne profits will be ascertained on a separate application to be filed by the plaintiff-appellant herein.
For the above reasons I set aside the decree of the lower court and allow this appeal. The suit is decreed with costs against the first defendant. As far as the second defendant is concerned the declaratory relief will stand. The first defendant will pay the costs of the appellant in both the courts The second defendant will bear her own costs.
C. M. P. No. 4771/1973 :--After this appeal has been posted for judgment Mr. Rajeswara Rao has filed a petition for admission of certain document as additional evidence. I do not think that I can entertain this petition at this last stage. The petition is, therefore dismissed. After the judgment was pronounced Mr. Rajeswara Rao pointed out that I have not dealt with this aspect namely that assuming the contract was for the benefit of the firm, the suit must be filed by the plaintiff by impleading all the other partners as parties to the suit. I have already held that the contract was for the benefit of all three partners and that all other partners have already given up their claims in the contract. It is, not therefore, necessary to implead them as parties to the suit. Moreover, the plaintiff has already obtained a sale deed in pursuance of Ex. A-1 contract and is asking for declaration of his title. To that suit the other partners are not necessary parties. Further, there was a suit for dissolution of the partners and none of the papers concerning the dissolution of the partners have been placed in this proceedings. I do not, therefore, think that there is any substance in this objection of the learned counsel.