Chinna Reddy vs Pujari Keshanna

Khaliluzzaman Siddiqi, J.—The suit land formed part of a Vatandari property and during the Government''s supervision, the suit land was granted to Buchamma''s husband now deceased. Thereafter there was some litigation with regard to this land as a part of the Vataiidari property. A suit was filed by Buchamma''s deceased husband against Chinna Reddy. The suit was decreed in the trial Court. During the pendency of the second appeal in the-High Court preferred by Chinna Reddy the suit land was sold to the Plaintiff of the present suit Pujari Keshanna. By then the Plaintiff in that suit (Buchamma''s husband) had died and she represented her husband in that litigation. The second appeal in the High Court was disposed of under a compromise decree dated 28th Ban-man, 1346F.

Under this compromise certain terms between Buchamma and Chinna Reddy were arrived at and really the disposal of this case depends on the interpretation of the terms of the compromise decree.

According to the terms of that decree Buchamma filed a suit against Pujari Keshanna for cancellation of the deed of sale executed by her and for return of the suit property. In that suit there were allegations of fraud and misrepresentation. The suit was disposed of against the Plaintiff for want of proof. Immediately on the termination of that suit the present suit was filed by Pujari Keshanna for possession of the suit land, for cancellation of the compromise decree of the High Court on the basis of the sale deed executed in his favour by Buchamma on the 7th Dai, 1346 Fasli. The suit was decreed by the trial Court and that decree was confirmed by the First Appellate Court with some modifications. The Plaintiff has presented a cross-appeal to the extent of the costs in the First Appellate Court. Now he has appealed before us not only for the costs of the two lower Courts, but also with regard to an additional order passed by the lower Appellate Court declaring the Plaintiff liable to pay an annuity in the nature of Mahasil payable to the Inamdar (Appellant) Chinna Reddy.

We have heard the arguments of the learned lawyers at some length. It is contended on behalf of Chinna Reddy (Appellant-Defendant) that the Plaintiff''s suit based on the sale deed executed in his favour by Buchamma is inoperative against him under the provisions of Section 52, T.P. Act because the disposition intervivos took effect while that property was the subject of a civil suit by the transferor against him. He, therefore, contends that in view of the compromise decree passed in the High Court, the Plaintiff is bound by that decree under the provisions of the Section mentioned above. He has no right under the sale deed to enforce against the Appellant.

It is contended by the able lawyer for the Respondent that while his client is bound u/s 52 as a transferee of the binding result and conclusion of the civil suit, that was pending at the time, yet he submits that under the terms of the compromise decree his right to the property has not been varied or affected. His contention is that transfers that may be affected u/s 52 are voidable in their nature'' and not void and that being so that would operate and stand until they are avoided, subject and confirming to the decision determining the civil suit.

He refers to the various terms of the compromise decree and submits that under that decree Buchamma did not actually give up all her rights to the property, but she actually retained that so as to tile a suit against the transferee for value and the rights of Chinna Reddy might have come into existence under the compromise -decree if she succeeded in recovering the property from the Plaintiff at all, because according to the agreement she was to file a suit for that recovery and again in case she failed to recover that property, there were certain rights that are determined in the terms of the compromise with regard to certain amounts that were to be advanced or were payable under the terms of that decree.

The position is quite clear. The sale was held during the pendency of the suit and it tell subject to the provisions of Section 52. The sale, how-ever, is voidable and not void because that sale would operate in all other respects subject to the result of that suit and therefore subject to the rights of the litigating parties who have to exercise the right of option in avoiding the sale Naturally if such a person does not exercise his option or fails to exercise his option or contracts himself out of it, the sale which is otherwise valid would, of course, as between the vendor and the purchaser, be operative and would be a valid transfer of the property.

It is conceded on behalf of the Plaintiff that; the result of the suit is binding on him. There fore, the only question to be determined and which does not appear to be altogether without | some difficulty is whether the compromise decree does confer or create a right in Chinna Reddy to enable him to exercise the option u/s 52. That of course would depend on the terms or the decree. This decree is divided into a number of terms but the result of this decree is that:

(1) While Buchamma declares that she gives up all her rights to this property,

(2) At the same breath she undertakes to obtain an amount from Chinna Reddy to prosecute a civil suit to recover the property from the Plaintiff.

(3) That is to be done obviously to pass the property on to Chinna Reddy (or in a representative character for him).

(4) As a result of this litigation or otherwise if the land is recovered Chinna Reddy secures it and he pays a certain sum of money to this lady. On the other hand if they fail to secure this land, she is to refund certain amounts that are advanced to her under this agreement.

In view of the Respondent''s contention, the question is whether in view of the fact that Respondent No. 1 is to file the suit, the property was with Respondent No. 1, and she contracted to transfer the property after the deed of sale was cancelled, or whether Chinna Reddy had acquired rights under this compromise decree so as to avoid Plaintiff''s rights under the sale deed, in pursuance of the provisions of Section 52. In view of the fact that according to the terms of the agreement, Chinna Reddy would only get this property if they succeed against the Plaintiff and that in case they failed the Respondent No. 1 was to return the advances.

I am of opinion that the real intention was that both the contracting parties would work for the recovery of the property; if they succeed it the property would be available to Chinna Reddy. However it is clear that Respondent No. 1 had no right whatever thereafter to the property; and the term that she is to file the suit, in my opinion, is merely a mode that was foolishly conceived at the time, but the real intention was that the property was to pass to Chinna Reddy and no right in the property remained in Buchamma. The fact that she was to receive a certain amount on final success would not in any way alter the situation.

Therefore, the Plaintiff is bound by the terms of the compromise decree. In the compromise it is stated that Pujari Keshanna was a ''pirokar'' in this case and he has by fraud and misrepresent; tation got a sale deed executed in his favour (dated 7-2-1946) and had an application presented by Respondent No. 1, that his name should be entered in his place and that it being found that application may be cancelled, and the name remained as Respondent No. 1.

The terms of the compromise are (1) Chinna Reddy pays Rs. 800/- to Buchamma Respondent No. 1 to be paid as follows:

(i). Rs. 100/- at the time of sanction of compromise deed;

(ii) Rs. 50/- for suit expenses which Respondent No. 1 will have to file against Pujari Keshanna for cancellation of sale deed dated 7-2-1946, which was got executed by misrepresentation and fraud, or if Pujari Keshanna files suit at the time of putting in defence, etc.

(iii) Rs. 350/- to be paid at the time of final judgment of above suits if the decree is can celled by official or private act.

(iv) For the above amounts she gives up all her rights in the land in favour of Chinna Reddy.

(v) If the sale deed remains she is entitled to return of Rs. 150/-.

In my opinion both the parties contracted to recover the property from Pujari Koshanna her rights in it were transferred to Chinna Reddy, who advanced Rs. 100/- and further Rs. 50/- was to be advanced for Respondent No. 1 to file a suit. In view of these considerations, as the Plaintiff is bound by the result of the suit, his right in the property against the claims of the decree-holder had not matured to enable him to a declaration. Therefore, his suit must be dismissed. I do not think it is a proper case where the Court can exercise its powers to grant a relief such as the declaration of the Plaintiff''s right. The suit is in any case premature. I, therefore, allow this appeal and dismiss the Plaintiff''s suit with costs throughout.

Deshpande, J.

I have had the advantage of going through the judgment prepared by my learned brother, Hon''ble Mr. Justice Khaliluzzaman Siddique. I am very sorry that I cannot agree with that judgment.

This is a second appeal against the judgment of the District Judge, Gadwal, dated 15th Khurdad, 1351 Fasli by which the learned District Judge partly allowed the appeal holding that so far as cancellation of the compromise decree is concerned the lower Court''s judgment was set aside while the rest of the judgment was upheld and the cross-appeal of Pujari Keshanna allowed. Thus the appeal of Chinna Reddy was partly allowed against the judgment of the Munsiff, Samasthan of Gadwal, dated 13th Bahman, 1350 Fasli by which the Plaintiff''s suit was decreed and the compromise decree dated 23th Bahman, 1346 Fasli was cancelled and the Plaintiff was given possession of the disputed land.

the facts of this case in brief are: The Plaintiff, Pujari, Keshanna, filed a suit for possession of land Survey No. 202 situated at village Satti Atmakur and for cancellation of compromise

decree passed by the High Court, dated 28th Bahman, 1346 Fasli alleging that originally, Yedda Pegunta, the husband of Defendant No. 2, was the original owner of this land and was in possession of the said land for more than 20 years.

In the year 1338 Fasli, Defendant No. 1 began to interfere with the possession of the husband of Defendant No. 2 on the ground that the suit land was a grant from the State of Gadwal and when the Mauza in which the land is situated was taken over by the Government, the land was leased to Yedda Pegunta. When the Mouja was returned to the State, Defendant No. 1 claimed the possession of the land, and began interference in the possession of husband of the Defendant No. 2.

Therefore, Defendant No. 2 filed a suit for the declaration of his right and temporary injunction against Defendant No. 1. During the pendency of this suit, husband of the Defendant No. 2 died. Defendant No. 2 was brought on record as the legal representative of the deceased. This suit was decreed by the original Court and this decree was upheld by the First Appellate Court. The Defendant No. 1 filed a second appeal to the High Court.

On 7th Dai, 1346 Fasli, Defendant No. 2 sold this land to the Plaintiff for Rs. 2,000/- and executed a registered sale-deed in favour of the Plaintiff and gave him possession also. The Plaintiff gave an application to be substituted in the place of Defendant No. 2 as the Respondent to the appeal in the High Court; but no order of the Court was given on this application. During the pendency of this appeal Defendants No. 2 and No. 1 made a compromise and obtained a compromise decree from the High Court on 23th Bahman 1346 Fasli in the absence and without the knowledge of the Plaintiff.

According to the terms of the compromise, Defendant No. 2 filed a suit against the Plaintiff for cancellation of the sale-deed dated 7th Dai, 1346 Fasli; but that suit was dismissed u/s 208 of the Hyderabad CPC The Defendant in spite of the fact that he had no right in the property dispossessed the Plaintiff illegally, therefore, the Plaintiff''s prayer is that he should be put in possession of the disputed land and the compromise decree be cancelled.

The Defendant in his written statement has taken several objections; but the main contention was that as the sale-deed was effected during the pendency of the suit, it is void, and the Plaintiff has got no right to the property. After taking evidence original Court decreed the suit and the lower Appellate Court upheld this decree to the extent of the possession of the disputed land; but set aside the judgment to the extent of the cancellation of the compromise decree passed by the High Court against which, the Defendant No. 1 has preferred this second appeal.

The main contention of the Advocate for the Appellant is that admittedly as the sale-deed of the Plaintiff has been executed during the pendency of the suit, the Plaintiff has got no right to the suit property. Therefore, appeal must be allowed and he relies upon Section 52, T.P. Act. Section 52, T.P. Act is as follows:

During the pendency in any Court having authority in British India or established beyond the limits of the British India by the Central Government or the Crown representative of any suit or proceeding which is not collusive and in which any right to immovable property is directly and specifically in question the property cannot be transferred or otherwise dealt with by any party to the suit or proceeding so as to effect the rights of any party thereto under any decree or order which he made therein under the authority of the Court and on such terms as it may impose.

This Section does not make the transfer ''pendente lite'' by a party to a suit or proceeding ''ipso facto'' void. It merely cannot affect the rights of any other party to the suit under any decree or order that may be made in the suit or proceedings and it is only voidable at the instance of such party. In other words, the doctrine of ''lis pendens'' applies only to transfers and other dealings which are inconsistent with the rights declared by the decree or order in the suit or proceeding. Rights not embodied in the decree or order are not protected by this Section.

In order to understand whether this Section is applicable to the facts of this case, the compromise decree passed by the High Court on 28th Bahman 1346 Fasli must be looked into. Relevant terms of the decree passed by the High Court are to the following effect:

(a) that the Appellant, Chinna Reddy, shall pay the Respondent No. 1, Yedda Buchamma, a sum of Rs. 800/- (Sicca Osmania) in the following way:

(1) Rs. 100/- (O.S.) shall be paid in the presence of the Bench at the time when the compromise petition will be granted.

(2) Rs. 50/- shall be paid for the expenses of the suit which ought to be filed by the Respondent No. 1 against Pujari Keshanna for the cancellation of the sale deed dated 7th Dai, 1346 fasli, executed by fraud and deceit or in case Pujari Keshanna files a suit, the sum will be paid at Gadwal at the time of filing written statement within 15 days from the passing of the compromise decree.

(3) the rest Rs. 650/- (O.S.) will be paid after the final disposal of the suit by or against Pujari Keshanna, as the case may be, or it will be paid by Chinna Reddy, Appellant (in which are included his executors, Trustees and heirs) to Yedda Buchamma, Respondent (in which are included her executors, Trustees and heirs) even before this time in case the sale-deed dated 7th Dai, 1346 Fasli in favour of Pujari Keshanna stands cancelled by any means, public or private. On the other hand, if through any reason the sale-deed remains as it is, then the Appellant is entitled to get back his Rs. 150/- which has been paid.

(b) that Yedda Buchanna, the Plaintiff-Respondent No. 1 surrenders all her rights which she has in the disputed land, named Muddamatean, situated as Setti Atmakur, Samasthan Gadwal, in favour of Chinna Reddy, the Appellant, in consideration of the said sum and in future the Appellant, Chinna Reddy, will be the owner and possessor of the disputed land.

This is in substance the compromise that was effected between the Defendant No. 1 & Defendant No. 2. The High Court passed the decree accordingly. Now this decree is to be interpreted & to be seen whether Section 52, T.P. Act is applicable and to what extent.

Considering the terms of the compromise decree, it will be found that this decree creates a conditional right in favour of Chinna Reddy. If the conditions are fulfilled, Chinna Reddy will get rights. If not, the status quo will be maintained. From the terms of this compromise, it is quite evident that Yedda Buchamma, Defendant No. 2 surrendered her rights in favour of Chinna Reddy in consideration of the said sum which is Rs. 800/-. As regards this consideration, it had been agreed that Rs. 100/- will be paid in the Court and Rs. 50/- will be paid for filing a suit or defending a suit as the case may be by or against the Plaintiff, Pujari Keshanna, in order that the sale-deed dated 7th Dai, 1346 Fasli in favour of Pujari Keshanna be cancelled and the rest of the consideration will be paid when the filial decision is given by the Court in these suits. Further it was agreed that in case the sale deed remains valid, J then the sum of Rs. 1507- paid to Buchamma Defendant No. 2, will be taken back from her and thus the compromise will stand cancelled and no rights created.

So, it is evident that after the sale deed in favour of the Plaintiff stands cancelled, the Defendant No, 1 will get rights under this compromise decree, otherwise not. No rights will accrue as per terms of the compromise decree unless and until the conditions precedent are fulfilled. The Defendant No. 2 filed a suit according to the terms of the compromise against Pujari Keshanna which was dismissed as no proof was forthcoming. There fore, when neither privately nor through any Court, the sale-deed was declared invalid; but stood as it is, then the only right that the Defendant No. I had was to get back his Rs. 150/- and. nothing else.

So, if Section 52, T.P. Act is made applicable to the facts of this case, it cannot be said that it will affect Plaintiff''s possession. A transfer ''pendente lite'' is not ''ipso facto void. It is voidable at the instance of the decree-holder it will affect the Plaintiff only so far as his rights are inconsistent with the rights declared by the decree. From the facts stated above, the High Court''s, decree is not inconsistent with the Plaintiff''s right. Therefore, the contention of the Appellant that because of Section 52, T.P. Act the Plaintiff has got no right in this property fails. In view of these facts, I see no force in appeal preferred by the Appellant and, therefore, in my opinion, the appeal is liable to be dismissed. The judgment of the lower Court is upheld.

Advocate for the Respondent argued that the lower Court''s judgment to the extent of the order that the Plaintiff to pay annuity to Defendant No. 1 is not correct and must be cancelled, It is said that the land in question is a Crown land and as such the Defendant No. 1 is entitled to get annuity from the possessor of the land; but this contention has got no force. The original Court has decided that it is not Crown grant with which I agree. Therefore, the argument of the Advocate for the Respondent is correct and to this extent, the judgment of the lower Appellate Court is set aside and the Respondent is entitled to the costs of both the lower Courts. Thus the cross-appeal is allowed.

Defendant''s appeal dismissed and cross-appeal allowed.

Mohd. Ahmed Ansari, J.

This appeal by Defendant No. 1 and a cross-appeal by the Plaintiff have been referred to me because of the divergent views entertained by the learned Judges of a Division Bench relating to the terms of a compromise filed in this Court in another case on Bahman 28, 1356 P. (31-12-1936). The view taken by the senior Judge of the Division Bench is that certain terms of the agreement did not amount to a condition precedent, and, therefore, the estate under the compromise vested in the Defendant-Appellant, whereas the other learned Judge reached the conclusion that the terms dis-constitute such a condition, and, therefore, the Plaintiff was not divested of the estate.

In order to appreciate the elaborate arguments advanced in support of each view, a narration of the important facts of the case is necessary. It appears that the land in dispute was claimed by the husband of one Buchamma Defendant No. 2 to the case under appeal, as ''Kaul property, whereas Defendant No. 1 has been asserting all along that it formed part of his ''Inam'' and granted to his ancestors by the Jagirdars of the Gadwal Samasthan. The husband instituted a, suit for a declaration and permanent injunction against the Defendant-Appellant of this appeal, and this suit was decreed by both the lower Courts. Thereupon the party affected filed an appeal in this Court, and during the pendency of the appeal Buchamma, who had been substituted as an heir on the death of her husband, alienated the property in favour of one Pujarl Kishtiah on Dai 7. 134G Fasli (11-11-1936).

Soon after an application was made by the transferee to be impleaded as a party to the appeal; but no final order had been passed on this application, when a compromise was filed in this Court between the Defendant, who had filed the appeal, and Buchamma. This Court passed an order directing the appeal to be decreed in terms of the compromise. It is admitted that Buchamma afterwards filed a suit against the transferee alleging the transfer to be fraudulent; but this suit was dismissed for non-prosecution.

Thereafter, Pujari Kishtiah, the transferee, filed the suit that has given rise to this appeal for the recovery of possession of the property which has been conveyed to him by Buchamma on Dai 7, 1346 P. (11-11-1936), and impleaded the parties to the compromise as Defendants. The suit was decreed by the trial Court; but the lower Appellate Court while sustaining the decree of the trial Court for the possession of the property, dismissed the claim for costs and ordered payment of the revenue of the land to Chinna Reddy, Defendant No. 1. Both the Plaintiff and Defendant No. 1 then filed the two appeals wherein the learned Judges of the Division Bench have differed on the constructions of the compromise.

It is conceded that the transfer by Buchamma in favour of Pujari Kishtiah was subject to the result of the appeal, inasmuch as the transfer had been made during the pendency of the appeal and this result of the appeal would also cover any compromise arrived at between the parties to the appeal. The proposition of law which has been strongly contested by the learned Advocate of the Appellant is that where vesting of a property is made subject to a condition, the strict fulfilment of the condition precedent is not necessary for the vesting of the estate. In support of this argument he has relied on the observations of their Lordships of the Privy Council in--Umes Chunder Sircar v. Zahur Fatima AIR 18 Cal 164 at p. 176 (A).

In the case, full estate was given to a lady if she had an issue by the grantor, her husband, and if she had no such issue then for her life, and thereafter to the two sons of the settler in perpetuity. On the day the property was attached, the lady had no, issue and a question arose whether the interest of the sons was vested and therefore attachable. Their Lordships of the Privy Council held that at the time of the attachment the sons had vested remainder. Mr. Deshmukh relying on the aforesaid observation has--argued that notwithstanding possibility of a son being born to the lady, the sons were held as having a vested interest, and, therefore, even a contingent interest can be treated as vested.

I do not think the observations of their Lordships of the Privy Council in the case have the effect of obliterating the well-known distinction between the contingent and the vested remainders. The distinction is that when vesting of some estate is dependent upon an event that may or may not happen, such an estate is called contingent interest, and if the event is bound to happen then it is vested. On the date of the attachment in the case before the Privy Council, there was no issue of the lady, therefore she had under the settlement a life estate, and the interest of the two sons was vested, in that the life estate of the lady was bound to terminate. The observations of their Lordships of the Privy Council, therefore, in my opinion, do not support the argument advanced by the learned Advocate of the Appellant.

It was then argued that if a condition precedent is for the benefit of the person, who is given an estate, then he takes the estate immediately. This statement of law is too broadly stated. To my mind the correct position is that where an estate is to vest in a person on fulfilment of certain conditions, the intention being clear that it should not vest unless the condition is fulfilled, then strict compliance is necessary before the party claiming the estate under the instrument can assert that he has become the owner of the estate. This is the position not only so far as legal estates are concerned, but is true even as regards the equitable estates. I would cite the following observation of Lord Chancellor in the case of--Popham v. Eampfeild (1682) 23 ER 325 at P. 326 (B):

...precedent conditions must be literally performed; and this Court will never vest an estate, where by reason of a condition precedent, it will not vest in law.

The essential question in these appeals, therefore, is the interpreting the terms of the compromise filed in this Court on Bahman 28, 1346 Fasli (31-12-1936). The compromise is in the form of an application and consists of several paragraphs. In Paras 1 and 2, allegations are made about the transfer in favour of the Plaintiff to this suit being fraudulent, and then Para 3 contains the main terms. It can be sub-divided into two parts. The first relates to the consideration and says that out of Rs. 800/-, the lady was to receive Rs. 100 when the compromise was to be presented in the Court, and Rs. 50 for the expenses of the suit which was to be filed for getting the transfer cancelled; but the bulk of the money, i.e., the sum of Rs. 650, was not to be payable until the final decision in the litigation against or by Pujari Kishtiah had been given, or the deed in his favour is somehow or other cancelled. Then in the next para, there is a declaration by Buchamma that all her title and interest in the property in dispute was being relinquished in consideration of the aforesaid amount in favour of Chinna Reddy and Chinna Reddy would be the owner, and possessor of the land in dispute.

There is this point in favour of holding the cancellation of the earlier transfer as a condition precedent that generally parties to a contract contemplate simultaneous fulfilments of their obligation under it, that is to say, each party makes performance of his part of the obligation dependent on the other party being in a position to perform his and where the performance of the obligation by one is postponed to a certain date, then, unless there be strong Indication of the intention to the contrary, the performance of the obligation by the other party is also postponed to the date. That being the general position, it appears to me that Chinna Reddy could not claim the possession of the estate until the full amount would not become due until the condition about the cancellation of the sale deed in favour of the Plaintiff to this suit was fulfilled--In other words, the cancellation of the sale deed in favour of the Plaintiff was a condition precedent to both the payment of the full amount of the consideration and the vesting of the estate.

There are other material points in the document indicating that the condition precedent to the vesting of the estate was the cancellation of the sale deed. Unless the deed was not cancelled, there would not he any indefeasible title in the lady to convey. Then why should she deliver possession with its attendant benefits without receiving the full consideration for the transfer? The subsequent conduct of the lady in immediately instituting a suit for the cancellation of the deed is also corroborative evidence showing a similar intention. I, therefore, agree with the view of my learned brother Vithal Rao Deshpande J. that as the earlier transfer was not cancelled and it was the condition precedent, the Defendant-Appellant has not that right, in him which would entitle him to withhold possession from the Plaintiff-Respondent, who is entitled under a sale deed which purports to have been executed for a valuable consideration. Till the cancellation, the Appellant has a contingent interest which may or may not become vested.

It was argued by the learned Advocate for the Defendant-Appellant that his client has raised in the case a plea of the conduct of the Plaintiff and the lady being fraudulent and there should have been an issue in the case about it. But there is a suit filed by his client raising similar questions, and I feel that it should be decided in the suit. The present appeals can be disposed of on the short ground that because cancellation of the earlier transfer constitutes a condition precedent to the vesting of the estate in the Defendant and it has not been strictly complied with, the decreeing of the claim is just. In this particular case, it is not necessary to decide whether the Plaintiff in this case along with his transferor has been guilty of fraud and liable to pay compensation or other relief. The Plaintiff-Respondent succeeds on the short ground that what was necessary for resisting his claim for possession has not been done, and he is also entitled to costs and is non-liable for payment of the revenue of the Defendant-Appellant.

I, therefore, agree entirely with the conclusion of my learned brother Vithal Rao Deshpande J. in dismissing the Defendant''s appeal and allowing the Plaintiff''s cross-appeal only to the extent of costs and non-payment of ''Naz-rana''. As regards the claim for cancellation of the compromise, it is dismissed.