H.N.

Narayanaswamy Naidu vs Deveeramma 26

September 1980

SUBMITED TO -:
MRS. Deborisha Dutta

SUBMITTED BY -:
ARCHIT JAIN
(18LLB008)

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 ACKNOWLEDGEMENT

This is to certify that the project work is done by understanding and analysing. Therefore, I Archit
Jain give hearty regards and thanks to my faculty Asst. Professor Deborisha Dutta who gave me the
wonderful opportunity to complete such an interesting project.
The least replica which could be found in this report is the major findings of case laws that have been
referred throughout. I have learnt a lot from this project.

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 TABLE OF CONTENTS

1. INTRODUCTION…………………………………………4
2. JUDGES……………………………………………………4
3. FACTS OF THE CASE…………………………………….4
4. ISSUES……………………………………………………...5
5. JUDGEMENT………………………………………………5
6. CRITICAL ANALYSIS…………………………………….7

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 INTRODUCTION

It is a case of property law act, the section applied here is Section 3 of property law act. There were 3
defendants and 1 plaintiff.
This appeal by defendant 3 is directed against the judgment and decree dated 24-10-1973 passed by
the Civil Judge, Hassan, in Regular Appeal No. 176 of 1972, on his file, dismissing the appeal by the
present appellant before him, on confirming the judgment and decree dated 10-10-1972 passed by
the Additional Munsiff, Hassan, in Original Suit No. 271 of 1969, on his file, decreeing the suit of
the plaintiff for specific performance of an agreement under Exhibit P-1 dated 1-10-1967.

Hon’ble JUDGE
Bench: G Sabhahit

FACTS OF THE CASE

 The appeal by defendant 3 is directed against judgement and decree dated 24-10-1973 passed
by civil judge.
 The plaintiff averred that defendant I and his mother sold the suit properties in her favour
on 21-3-1966 as per Exhibit P-2.
 But that they obtained an agreement to reconvey as per Exhibit P-3 on the same day
under which the plaintiff agreed to reconvey the properties to the vendors in case they pay
the entire amount of consideration after six years and within six months thereafter.
 However, since the vendors were in need of money, they further executed an agreement
that they would release the agreement of reconveyance under Exhibit P-1. It is for that
purpose that the present suit was instituted by the plaintiff in Original Suit of 1969 calling
upon them to execute the registered release deed as assured under Exhibit P-1.
  Defendants 1 and 2 filed their written statement denying the execution of Ext P-1.
Defendant 3 contended that he had purchased the right to obtain reconveyance from
defendants 1 and 2 under Ext. D-1 dated 29-5-1969. He further contended that he
obtained the right bona fide and without knowledge of Ext. P-1 for consideration and,
hence, the said Ext. P-1 was not binding on him.

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ISSUES RAISED IN THE CASE

 Has defendant 3 acquired the right of reconveyance from defendants 1 and 2?

 Is there no cause of action for the suit and is the suit not maintainable?

JUDGEMENTS

The learned Munsiff, appreciating the evidence on record, answered all the material issues in favour
of the plaintiff and, in that view, decreed the suit of the plaintiff as prayed for. Aggrieved by the said
judgment and decree, defendant 3 went up in appeal before the Civil Judge, Hassan, in Regular
Appeal No. 176 of 1972, as stated above. The learned Civil Judge raised the following points as
arising for his consideration during his judgment:

(1) Has the appellant acquired the right of reconveyance from defendants 1 and 2?
(2) Is the appellant a bona fide purchaser for value?
(3) Is it shown by the appellant that the plaintiff cannot enforce the agreement against him, even if
proved?
(4) What Order?

The learned Civil Judge, reassessing the evidence on record in the light of the arguments addressed
before him, held in the negative under Points 1, 2 and 3 and, in that view, he dismissed the appeal, on
confirming the judgment and decree of the trial Court. Aggrieved by the same, defendant 3 has come
up in second appeal before this Court.

The learned Advocate appearing for the appellant vehemently contended that the Courts below were
not justified in concluding that defendant 3 had notice of the agreement Exhibit P-1 entered into by
his vendors with the plaintiff and that therefore, he was not a bona fide purchase for value without
notice.

As against that, the learned Advocate appearing for the respondent/plaintiff argued supporting the
judgment and decree of the trial Court, confirmed by the first appellate Court.

The sole point, therefore, that arises for my consideration in this appeal is: Whether defendant 3 was
a bona fide purchaser for value without notice of the right to get the reconveyance from defendants 1
and 2?

Hence, it is obvious that defendant 3 who comes to the Court with the pleading that he was a
transferee for value. Who has paid the money in good faith and without notice of the original
contract Ext. P-11 shall have to prove that he was a transferee for value, that he paid his money in
good faith and that he paid so without notice of the original contract?

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 It is in this context that the learned Advocate for the respondent/plaintiff invited my attention to the
definition of the term 'Notice' as defined in Section 3 of the T. P. Act, 1882, which reads.

" 'a person is said to have notice' of a fact when he actually knows that fact, or when, but for wilful
abstention from an enquiry or search which he ought to have made, or gross negligence, he would
have known it”.

Explanation II to the said definition reads:

"Any person acquiring any immoveable property or any share or interest in any such property shall
be deemed to have notice of the title, if any, of any person who is for the time being in actual
possession thereof."

Relying on these, the learned Advocate appearing for the respondent plaintiff submitted that
defendant 3 not only had actual notice but also constructive notice as contemplated in Explanation II
to the definition of the term 'Notice' contained in S. 3 of the Transfer of Property Act, 1882.

The learned Advocate appearing for the appellant however, tried to meet this submission by inviting
my 'attention to a decision of the Patna High Court in the case of Shankar Prasad v. Mt.
Muneshwari , wherein their Lordships have made it clear that on the facts of that case, it was not
necessary for the defendant to further enquire with the occupant of the premises.

The facts of that case and the facts of the present case are entirely different. As rightly pointed out
by the learned Civil Judge, the facts of the present case are such as would induce any average
prudent man to go and enquire with the person viz., the plaintiff, who was in actual possession of the
premises. In Exhibit P-3, it is stated that before the properties are reconveyed, the costs for major
repairs shall be paid to the plaintiff. In Ext. D-1, it is stated that then was some litigation against
defendants 1 and 2 in which the right in question was attached. In this background, any average
prudent man ought to have enquired about the rights of the plaintiff, whether reconveyance was still
subsisting or whether he bad spent any amount further for major repairs or what was the nature of his
rights etc. Thus, it is obvious that but for the wilful abstention from enquiry, defendant 3 would have
come to know the entire facts and, hence, he should be deemed to have the notice of the rights of the
plaintiff. Further, even under Explanation 11 to the definition of the term 'Notice' contained
in Section 3 of the Transfer of Property Act, 1882, since the plaintiff was in actual possession,
practically as owner but for the reconveyance deed, it was the duty of defendant 3 to enquire with the
plaintiff about her rights. Even under the said provision, he should be deemed to have the notice of
the rights of the plaintiff.

Both the Courts below have held that defendant 3 had notice. The trial Court says that defendant 3
had actual notice, appreciating the evidence on record, as he was residing very near to the suit
premises within a furlong and that in all probability, he was aware of all the dealings between the
parties. In addition, the first appellate Court has held that defendant 3 shall also be deemed to have
notice of the rights of the plaintiff. In my considered view, both the Courts below are right in holding
that defendant 3 did have notice of the rights of the plaintiff and of the agreement entered into under
Exhibit P-1. That is further made probable by the fact that in Ext. D-1, defendant 3 has taken care to
see that the vendors are made liable for damages and return of purchase money in case the sale falls
through for any reason, on the charge of their other properties - movable and immovable. Therefore,
he cannot resist the suit instituted by the plaintiff for specific performance on the ground that he is a
bona fide purchaser for value without notice. The appeal, without more, is liable to be dismissed.

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 In addition, it was submitted at the Bar that this defendant 3 has not taken any action for getting the
properties reconveyed within the time stipulated. It is settled law that reconveyance is a concession
given by the vendee. It must be strictly observed by him; time is the essence of the contract. Since
defendant 3 has not taken any action in the matter, his rights, even if any, are obviously barred, that
is only by the way.

In the result, therefore, the appeal fails and is dismissed.

No, costs.

Appeal dismissed.

CRITICAL ANALYSIS
As per my view, the judgement was impressive and justified in its own sense. The judge gave clear
explanation for his judgement as the case contained many charges. The Judge clearly stated that
defendant 3 must have knowledge of the agreement between defendant 1 and plaintiff. If not, it was
his duty to find out whether there was another agreement made or not, as he lived very close to the
property and near the defendant. Therefore, the Judge gave the Judgement that Defendant 3 was not
liable for anything and the agreement between defendant 1 and plaintiff was valid and not void and
they were not liable for anything to defendant 3. As per my views, the judgement was reasonable and
justified.

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