MARINA APPA RAO Vs. MARINA VEERANNA

JUDGEMENT

(1.) This is a second appeal against the decree and judgment of the Court of the Subordinate Judge of Rajahmundry confirming that of the Court of the District Munsif of Ramachandrapur in O. S, No. 212 of 1946.

(2.) The plaint schedule property originally belonged to one Kondepudi Ramanna. He executed a Khandagutta cowle, Ex. D. 1 dated 9-6-1905, in favour of Sattiraju for a period of forty-one years. On 4-12-1915, Ramanna entered into an agreement to sell the same property in favour o the plaintiff's grandfather, Marina Veeranna. Marina Veeranna filed O. S. No. 926 of 1916 on the file of the Court of the District Munsif, Ramachandrapur, for recovery of a sum of money due to him on a promissory note executed by Ramanna. In that suit, on 17-91916 he attached before judgment the suit properties subject to his own right under the aforesaid agreement. After attachment, on 14-10-1916, Ramanna executed a sale deed conveying the plaint schedule properties to Sattiraju under Ex. D. 2. On 10-11-1916 Sattiraju, in his turn, executed a mortgage deed, Ex. D. 4 in favour of defendant 1 for a sum of Rs. 2000. Veeranna filed O. S. No. 1174 of 1916 for specific performance of the aforesaid agreement to sell and obtained a decree therein. To that suit Ramanna and Sattiraju were made parties. Pursuant to the decree for specific performance, Ramanna executed a sale deed, Ex. P. 1, on 6-4-1918 conveying the property to Veeranna for a sum of Rs. 2000. The -first defendant, in whose favour; Sattiraju executed a mortgage deed dated 10-11-1916. filed twelve years thereafter, O. S. No. 33 of "1928 for recovery of the amount due under the mortgage and obtained a decree therein. In execution of the decree the said properties were purchased by the other defendants in different shares and subsequently there were exchanges between them. The plaintiff who is the grandson of Marina Veeranna and is presumably named after him, filed O. S. No. 212 of 1940 on the file of the District Munsif of Ramachandrapur for establishing his right to the plaint schedule properties, for possession, and for mesne profits. The defendants raised various pleas which are reflected in the following issues : 1. Whether the agreement dated 4-12-1915 in favour of the plaintiff's grandfather is true and whether the decree in O. S. No. 1174 of 1916 in pursuance of the same is binding on the defendants? 2. Whether the sale deed dated 14-10-1916 in favour of Rimmalapudi Sattiraju the predecessor-in-interest of the defendants and the mortgage by him in favour of the first defendant and the subsequent proceedings O. S. No. S3 of 1928 and the E. P. No. 11 of 1930 are all true, valid and binding on the plaintiff? 3. Whether the defendants are entitled to any relief under Sections 41 of the Transfer of Property Act? 4. In any view whether the claim of the defendants is vitiated by the rule of 'lis- pendens'? 5. Whether the schedule properties were attached before judgment in O. S. No. 926 of 3916, and if so what is the effect of the same? 6. What is the effect of the proceedings in O. P. No. 73 of 1928 on the rights of the plaintiff and defendants? 7. Whether defendants are estopped to question the rights of the plaintiff? 8. Whether the khandagutta cowle in favour of Rimmalapudi Sattiraju is only a usufructuary mortgage and whether the suit of the plaintiff in its present form is not maintainable? 9. To what mesne profits and what rate is the plaintiff entitled? 10. To what relief is the plaintiff entitled? The learned District Munsif held, on the evidence, that the sale deed executed by Ramanna in favour of Sattiraju was a collusive one and therefore Ramanna. had validly conveyed title to Veeranna under Ex. P. 1. He also held that the mortgage by Sattiraju in favour of defendant 1 was also collusive. He also found that the claim of the mortgagee was affected by the doctrine of 'lis pendens'. In the result the learned District Munsif gave a decree to the plaintiff as prayed for. The defendants preferred an appeal to the Court of the Subordinate Judge of Rajahmundry. In appeal the only point argued was that notwithstanding the decree in O. S. No. 1174 of 193C the plaintiff's grandfather did not acquire a valid title under Ex. P. 1 as Sattiraju also did not join the sale deed. The learned Subordinate Judge held that the sale deed was executed by Ramanna for and on behalf of all the parties interested in the property at the time it was executed. He dismissed the appeal. The defendants have preferred this second appeal against that decree.

(3.) Learned counsel for the appellants contended that Ramanna having sold the property to Sattiraju, could not convey valid title to Veeranna and that the only person who could do so was Sattiraju. To put in other words, his contention was that if a person enters into an agreement to sell his property in favour of another and thereafter sells the same to a third party with notice of the prior agreement, the third party acquires a valid title to the same, subject to the right of the person in whose favour the earlier agreement has been executed to enforce his contract against him, At this stage it may be convenient to consider the relevant provisions of the various statutes and the cases cited by the learned counsel: Sections 54, T. P. Act: A contract for the sale of immovable property is a contract that a sale of such property shall take place on terms settled between the parties. It does not, itself, create any interest in or charge on such property. Sections 91, Trusts Act: 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 to the contract. Sections 40, T. P. Act: .........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 ease-ment thereon, such right or obligation may be enforced against a transferee with notice thereof or a gratuitous 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. Sections 27, Specific Relief Act: Except as otherwise provided by this Chapter, specific performance of a contract may be enforced against ......... (b) any other persons claiming under him by a title arising subsequently to the contract, except a transferee for value who has paid his money, in good faith and without notice of the original contract. In -- 'Subbiah Pillai v. Vellappa Naicken', 22 Mad LJ 124, Benson and Sundara Aiyar JJ. pointed out the proper form of a decree to be passed in a suit for specific performance of a contract to sell land. There the facts were: The first defendant agreed to sell certain land to the plaintiff. The first defendant subsequently sold the land to 2 to 4 defendants. The plaintiff asked for a declaration that the sale in favour of defendants 2 to 4 was void as against him and for a direction that defendant 1 do execute a conveyance of the land in the plaintiffs' favour. The District Court in that case gave the decree as prayed for. The High Court dismissed the appeal. At page 124 the learned Judges observed :