ETHIRAJULU NAIDU Vs. BOLE NAIDU DIED

JUDGEMENT

(1.) NAINAR Sundaram J: This letters patent appeal is directed against the judgment of Sengattuvelan, J., in Appeal No.56 of 1978. That appeal, in its turn, was one preferred against the judgment and decree in O.S.No.113 of 1972, on the file of Subordinate Judge, Vellore. The suit was laid by the original plaintiff, the first respondent herein, who is no more, and whose legal representatives have been brought on record the specific performance of an agreement of sale dated 28.4.1972, as per Ex.A.1, executed and registered by respondents 2 and 3 herein defendants 1 and 2 in the suit. The property originally belonged to one Chelvanaya-kiammal by virtue of an acquisition on 19.3.1945 as per Ex.B.3. The second-defendant is the daughter of Chelvanayakiammal and the first-defendant is the husband of the second defendant. Chelvanayakiammal settled the property on defendants 1 and 2 on 12.9.65 as per Ex.B.4. The factual and legal implications flowing under Ex.B.4 so as to clothe defendants 1 and 2 with right to convey the property, are also the subject matter of controversy in the present litigation and we shall presently advert to the same. On 19.5.1972, the appellants herein, defendants 3 and 4 in the suit, purchased the property from Chelvanayakiammal and defendants 1 and 2 as per Ex.B.l and B.2. The plaintiff laid the suit for specific performance of the agreement of sale dt.28.4.1972 as per ExA.l.on the contest raised by the defendants, the first court formulated as many as six issues, as follows: "(1)Whether the suit agreement to sell dt.28.4.1972 is true, valid and binding on defendants 3 and 4. (2) Whether plaintiff had been ready and willing to perform his part of the contract under the suit-agreement" (3) Whether defendants 1 and 2 had no right to the suit property and to enter into the suit agreement to sell the same" (4) Whether defendants 3 and 4 are bona fide purchasers of the suit property for value without notice of the suit agreement" (5) Whether the plaintiff is entitled to the relief of specific performance as prayed for" (6) To what relief, the parties are entitled"

(2.) THE parties placed their evidence, oral and documentary, and that was the subject matter of consideration by the first court and the first court held that defendants 1 and 2, on the date of ExA.l had not acquired absolute right to convey the property: ExA.l is not binding on defendants 3 and 4 that the plaintiff was ready and willing to perform his part of the contract defendants 3 and 4 have purchased the property for value without notice and hence the plaintiff is not entitled to any relief. As a result, the first court dismissed the suit with the costs of defendants 3 and 4. THE plaintiff appealed in A.S.No.56 of 1978 to this Court and that was dealt with by Sengottuvelan, J. THE learned single Judge, differed from the view of the first court with regard to the rights of defendants 1 and 2 in a presenti to convey the property, and held that sales in favour of defendants 3 and 4 as per Ex.B.1 and B.2., were for value and without notice of ExA.l. However, the learned shingle Judge, on the question as to whether defendants 3 and 4 are bona fide purchasers opined differently. THE learned single Judge permitted evidence on behalf of the plaintiff by marking the encumbrance certificates for the property as Ex.A.16 and A.17 and the Index Register in the office of the Sub-Registrar, Arakkonam as Ex A.18 and the relevant entries therein as Ex.A.18 (a) and A.18 (b). On this ground alone the learned single Judge chose to allow the appeal, preferred by the plaintiff set aside the judgment and decree of the first court and decreed the suit of the plaintiff, as prayed for. THE learned Single Judge disallowed costs both in the suit as well as in the appeal.

(3.) THE learned single Judge, taking up the question as to whether defendants 3 and 4 are transferees for value without notice, held that consideration did pass and defendants 3 and 4 could not be stated to have had notice of the suit agreement Ex.A.1 either directly or constructively. But, on the aspect of good faith on the part of defendants 3 and 4 and hence they could not be held to be bona fide tranferees. It is this finding of the learned single Judge that led him to discountenance the case of defendants 3 and 4, to allow the appeal, preferred by the plaintiff and to decree the suit. It is this finding that is the subject matter of serious challenge before us by learned counsel appearing for defendants 3 and 4. As pointed out by a Bench of this Court, in Arunachaia THEvar and others v.Govindarajan Chettiar and others, (1977)2 M.LJ.431, the question of good faith is necessarily a question of fact, which has to be determined from the materials placed and surrounding circumstances the test to be applied to find out whether there is good faith or not is to see whether the person concerned has acted honestly or not in short, the essence of good faith is the honesty of implead on THE legal presumption of knowlege or notice arises from wilful absention from enquiry or search of gross negligence or omission to search the concerned registers kept under the Registration Act these factors may amount to gross negligence, so as to attract the consequences, which result from notice a purchaser is deemed to have notice of anything which he has failed tto discover either because he did not make the due investigation with regard to the title to the property or because he did not enquire for the deeds relating to the property and the onus of proof lies upon the party seeking to defeat the prior agreement to adduce prima facie evidence that he is a bona fide transfere for value without I notice. Though it is said that this burden is light and is in the negative line, yet it is not possible to be little the significance of this onus and each case will have to be examined on its own facts to find out as to whether the onus has been fully and satisfactorily discharged or not. Heree, we find that the learned single Jdge found, on facts, that there was lack of bona fides on the part of defendants 3 and 4 with regard to entering into the sale transactions as per Ex.B.l and B.2. THE learned Single Judge permitted the plaintiff to place additional evidence. We heard submissions form the learned counsel appearing for defendants 3 and 4 attacking the reception of additional evidence and further attacking the credence that could be attached to the additional evidence placed. It is true that the powers of this court under the Letters Patent are not limited to questions of law alone and it will be open to this court to review even findings of facts in a Letters Patent Appeal from a frist appeal, heard by a learned single Judge of this Court.