K S RM RAMANATHAN CHETTY Vs. RANGANATHAN CHETTY

JUDGEMENT

(1.) The question raised by this Letters Patent Appeal is one of considerable importance and difficulty. It is, to put it shortly, how far it is open to the Court to refuse to recognise the title of the plaintiffs-appellants suing to recover immoveable property of the value of more than Rs. 100 which they purported to convey to the defendants-respondents by an unregistered document, on the ground that the transfer has been acted upon by the latter who spent considerable money in erecting valuable buildings on the land, with the knowledge of and encouraged by the appellants. The facts are sufficiently set forth in the judgments For facts see the report of the learned Chief Justice and Seshagiri Aiyar, J., who took different views and it is unnecessary to repeat them in detail. The result of the findings is that at the time of the transaction in question, which was an exchange of two plots of land between the appellants and the respondents, both the parties believed that the document evidencing the exchange did not require registration. Possession was taken by each party of the plot received by him under the exchange. The respondents erected a building which cost about Rs. 40,000 placing the wall of this building on one side on the land which they had got in exchange, and the appellants during the time the building was in progress also demanded and obtained a sum of Rs. 525 from the respondents as compensation on the allegation that the land which they had parted with was larger in quantity than the land which they had received from the respondents. It is further found that the objects of the appellants in instituting the suit to recover the land which belonged to them before the exchange and which they say still belongs to them notwithstanding the attempted transfer is not so much to benefit themselves as to injure the respondents. The question for decision, however, is one purely of law, viz., whether, under the circumstances, the equities in favour of the defendants are a sufficient answer to the plaintiffs suit for ejectment.

(2.) The effect of Sections 54 and 118 of the Transfer of Property Act on what has taken place in this case is, that Exhibit B which is described as an agreement of exchange is ineffectual to create a valid transfer of the plaintiffs land, and by reason of Section 49 read with Section 17 of the Registration Act that document cannot be held to affect the right of the appellants to the property in dispute.

(3.) On behalf of the appellants it is argued that their title to the property remains and as the suit is within time, to refuse their claim for recovery of the land will be virtually nullifying the enactment of the legislature the effect of which is to preserve the title in them in spite of what has taken place. The answer to this argument on behalf of the respondents is that in none of the enactments referred to, does the legislature purport to deal with the question of rights based on equities arising from the actings and conduct of the parties. It is argued that it is open to the court to say to the appellants, " It is true that your rights in the property have not been transferred to the respondents by the instrument in question but having regard to what has taken place it will be fraudulent on your part to set up your legal title against the respondents and the Court will not help you to perpetrate the fraud."