N. Rajaratnam vs D. Satyanarayana

B. Prakash Rao, J.—The defendant is the appellant, who is aggrieved against the judgment and decree in A.S.No.152 of 1979 dated 20-10-1983 on the file of the I Additional Subordinate Judge at Kakinada arising out of judgment and decree in O.S.No.100 of 1976 dated 26-4-1979 on the file of the I Additional District Munsif, Kakinada.

The suit is filed for recovery of a sum of Rs. 4,664-52 from the defendant by sale of schedule property. As per the plaint, the defendant purchased land from the plaintiff on 6-5-1969 under a registered sale deed, wherein it was agreed that certain amounts to go in discharge of debts to creditors. However, the same having not been paid, one of the creditors obtained a decree in O.S.No.839 of 1972 on the file of the District Munsif, Kakinada, who laid execution and sought to proceed against the property. The claim filed by the plaintiff was allowed. However, the amount under the decree was paid on 13-8-1975 in full satisfaction. Though the plaintiff issued a notice, the defendant replied with false allegations. Hence the suit.

In defence, the case of the appellant was that though the sale to plaintiff was admitted with the terms and conditions, the said creditor suppressed payments made to him and collusively obtained a decree in O.S.No.837 of 1972 and the alleged payments later by the plaintiff are also collusive. Apart from other allegations and denying the contents of the plaint, it was pleaded that the suit is barred by limitation.

After a regular enquiry, the trial court dismissed the suit holding that the plaintiff is not entitled to recover. On appeal by the plaintiff, the lower appellate court reversed the same and decreed the suit claim.

Under Ex.A.1 dated 6-5-1969, the defendant purchased an extent of Ac.10-47 cents from the plaintiff. The total consideration shown was Rs.25,000/-, which has to be paid by the defendant to several creditors of the plaintiff, of them, one was Velagala Tirupatayya, who was paid partly. It is the case of the defendant that he has also made some more payments, which were not accepted by the court below. The son of the creditor- P.W.2 obtained decree in O.S.No.839 of 1972 against the plaintiff and obtained ex parte decree and in execution proceeded against the schedule property. Thereupon, the claim filed by the defendant in E.A.No.209 of 1983 was allowed. Later, the plaintiff paid the amounts under execution and obtained a full and final satisfaction receipt and the E.P., was terminated on 23-10-1975.

The core submission made on behalf of the appellant-defendant is that on the facts of the case, especially in view of Ex.A.1, the liability of the plaintiff ceases to the original creditor and thus there is total novation creating liability for the said debt on the defendant. Thus, there is no privity of contract and as such no liability can be fastened in view of the collusive decree obtained to which the defendant is not a party. However, it is now found by the court below that there is no specific plea in the written statement as to any such contract in between herself (the defendant) and P.W.2, the creditor. P.W.2 pleads total ignorance of the defendant and the sale transaction. There is no specific contract between the plaintiff and P.W.2 to recover the amount from the defendant. The part payments as evidenced with endorsements on Ex.B.1, the promissory note, are only made on behalf of the plaintiff and not the defendant. Thus, the creditor-P.W.2 is not a party to the transaction under Ex.A.1 between the plaintiff and the defendant. Further, in the claim petition, the defendant tried to wriggle out on the ground that he is not a party to the decree between the plaintiff and P.W.2. And, in the order thereon, in Ex.B.5, the court held that in the absence of a decree obtained for recovery by P.W.2 against the defendant, the property cannot be attached. Thus, the very same defendant pleaded in the said claim proceedings that there is no privity of contract. As regards the decree obtained by P.W.2, the court below found that it is not a collusive and the defendant is bound to pay the suit amount.

In the circumstances, no ingredients of any privity of contract is established between P.W.2 and the defendant and the contract under Ex.A.1 being between the plaintiff and the defendant, to which P.W.2 is not a party, there is no novation. The appellant is thus liable for the suit amounts. There are thus absolutely no merits in the appeal. Accordingly, the same is dismissed. No costs.