M K SUBBARAYALU NAIDU Vs. ARUNACHALA NADAR

JUDGEMENT

(1.) The suit out of which this Second Appeal arises was instituted by the plaintiffs for setting aside a Revenue sale in execution of a rent decree obtained by the first defendant against one Subbarayulu Naidu a registered pattadar. The main facts are not in dispute. The said Subbarayulu Naidu mortgaged the suit properties he was holding under the first defendant to one Doraiswami Konar on 2 October, 1908 and the latter obtained a decree in O.S. No. 43 of 1931 on the file of the Sub-Court, Tinnevelly and brought the properties to sale. The first plaintiff purchased the properties on 9 November, 1918 took delivery of possession of the same through Court on the 19 June 1919 and sold a portion of the property to the second plaintiff on the 8 January 1926. Ever since the date of the purchase the first plaintiff has been paying rent to the land-holder, the first defendant, and receipts were given by him for payment of the said rent. It appears that for arrears of rent due to the landholder by the said Subbarayulu the first defendant obtained a decree in Secs.17 of 1916. So on the date of the Court-auction purchase by the first plaintiff there was this decree for arrears of rent. In execution of that decree the first defendant put in? an application for sale in or about 1926, got a notice issued only to the registered pattadar, the said Subbarayulu Naidu,. and brought the properties to sale for arrears decreed in the said suit. The properties were purchased by the second defendant. This suit was instituted by the plaintiffs alleging that the said rent sale without notice to the plaintiffs is illegal, that the sale was brought about fraudulently by the first defendant in collusion with the registered pattadar who was his near relation, that the second defendant also participated in the said fraud and that therefore the said sale must be declared null and void and not binding on the plaintiffs. The learned District Munsif was of opinion that the sale without notice to the plaintiffs did not affect their interest, that the sale was also -brought about by the fraud of the first defendant but that the second defendant was an innocent purchaser, that though the sale might be set aside the second defendant was entitled to a refund of the purchase money and passed a decree setting aside the sale and directing a refund of the purchase money paid by the second defendant. So far as the costs of the suit were concerned, the plaintiffs were given a decree against the first defendant but they were directed to pay the costs of the second defendant. On appeal the learned District Judge was of opinion that there was no statutory provision which made it obligatory for the land- holder to give notice to the plaintiffs but that on principles of natural justice such notice would be necessary, that the whole proceedings were brought about by the fraud of the first and second defendants, that the second defendant was not an innocent purchaser and gave a decree in favour of the plaintiffs as prayed for. The direction as to the refund of the purchase money was therefore set aside. In regard to costs, he directed the second defendant to pay the costs of the appeal to the plaintiffs; but in regard to the costs of suit, he directed both the first and second defendants to pay the same to the plaintiffs. Two second appeals were filed against the decree of the District Judge, one (S.A. No. 1931 of 1931) by the second defendant against the entire decree and the other the present second appeal No. 94 of 1932 by the first defendant in so far as the decree directed him to pay the costs of the suit to the plaintiffs.

(2.) It appears that Second Appeal 1931 of 1931 has been dismissed on the ground that the appellant died and the appeal abated, no legal representatives of the appellant having been brought on record in time. Therefore so far as this second appeal is concerned, the decree of the lower appellate Court so far as the second defendant is concerned has now become final.

(3.) It is contended by Mr. Swaminatha Aiyar on behalf of the first defendant (Appellant in Second Appeal No. 94 of 1932) that the view of the lower Court on both the points, namely the question of notice and that of fraud, is wrong. His contention is that until a notice in writing was issued by the plaintiff under Section 146 of the Madras Estates Land Act to the first defendant and a patta obtained from him, it was not obligatory on the first defendant to issue any notice in the execution proceedings taken in connection with the rent decree obtained by the first defendant against the registered pattadar, and that the finding as to fraud was mainly based upon this absence of notice. It appears from the evidence that after the purchase by the plaintiffs first plaintiff produced the sale certificate before the landholder (first defendant) and the receipts issued by him for payment of rent (Exs. M. Series) clearly recite the purchase in Court auction by the first plaintiff,of the interest of the registered pattadar in the holdings. This is in my opinion a sufficient recognition by the landholder who in token thereof has been receiving rent from the plaintiffs up to the date of the revenue sale. Under Section 146 of the Estates Land Act where there has been a transfer of a holding either by private treaty or by involuntary sale, it is the duty of the landholder to recognise such transfer if notice in writing is communicated by the transferor and the transferee or where the transfer is effected by sale under an order of Court, the sale certificate or a certified copy thereof is produced. Therefore if the sale certificate is produced and the landholder acts thereon and receives rent, the obligation of the prior tenant the registered pattadar for payment of any rent ceases and the transferee becomes clothed with all the rights and obligations of a ryot under the Act. If there were already decrees obtained against the registered pattadar, they would certainly be binding upon the transferee because under Section 147 all acts and proceedings commenced or had under the Act before the giving of notice under Section 146 would be binding on the transferee. But once the transfer has been notified to the land-holder either by notice in writing or by the production of the sale certificate and the transferee is recognised, any proceeding commenced thereafter without notice to the transferee would not be binding on him. This appears to me to be the correct view on a reading of Secs.146 and 147 of the Estates Land Act. I am supported in this view by the observations of a Division Bench of this Court in Sri Mahant Prayag Dossjee V/s. Saranga pani Chetty (1922) 17 L.W. 361 : 1923 A.I.R. Mad. 486 where their Lordships Oldfield and Ramesam, JJ., observed referring to Section 146: We read the section as laying down that when there has been a transfer, whether before the commencement of the Actor after it, the transferee will be entitled to be impleaded in proceedings if he gives the notice which Section 146 prescribes but that until he does so, the existing pattadar will still be the person with whom the land holder has to deal.