Thursday, 28 February 2013

The agreement holder cannot become the owner by adverse possession.

 The agreement holder cannot become the owner by adverse possession. In order to protect possession, even under Section 53A of the Transfer of Page 2062 Property Act, the agreement holder, right from the date of agreement must show his readiness and willingness to perform his part of contract, showing that he has kept himself always ready to perform his part of contract. Readiness is one, which shows his capacity to pay the balance of consideration and perform the other obligations. In this case, when HRC is filed, defence is taken by the defendants that they are not the tenants and they got the HRC dismissed. When the suit is filed for possession, the identical defence is taken by the defendants that the suit is not maintainable for possession unless the plaintiff seeks declaration of his title, despite there being no dispute between the vendor of the plaintiff and the plaintiff. Defendants not only have not filed the suit for specific performance, they have denied the title of original owner. This only indicates the mental attitude of the defendants not to perform their part of contract. A person who is not ready and willing to perform his part of contract, is also not worthy to claim the protection under Section 53A of the Transfer of Property Act.

Karnataka High Court
Sri Venkatesh S/O Late Balappa And ... vs Sri D.A.C. Venkoosa S/O D. Ambasa on 7 September, 2007
Equivalent citations: AIR 2008 Kant 5, ILR 2007 KAR 4623, 2008 (3) KarLJ 335

1. This appeal is by defendants 1 to 3 against the judgment and decree dated 23.9.2006 in O.S.No. 8657/2002. Respondent is a plaintiff.
2. Suit is one for possession of the suit schedule property and for injunction.
3. Case of the plaintiff is that, under registered sale deed dated 27.6.1984, he purchased the suit schedule property and he was put in symbolic possession of the tenements in the suit schedule property. The deceased Balappa was a tenant on a monthly rent of Rs. 100/-.
Plaintiff demanded rent from said Balappa. Further, the notice sent by plaintiff returned with a shera as "refused". The plaintiff filed HRC No. 2169/88 under Section 21(1)(a) and (h) of the Karnataka Rent Control Act. Said HRC was dismissed holding that there is no relationship of landlord and tenant. Aggrieved by the said order, plaintiff filed HRRP No. 1237/1993. Even the said HRRP was also dismissed by order of this Court dated 13.1.2000. However, an observation was made that, the dismissal will not come in the way of the plaintiff to agitate his rights before the competent Court and the observation will not prejudice the suit that may be filed by the party. Further case of the plaintiff is that, he has filed this suit for possession based on the title.
4. Defendant No. 1 filed written statement. Defendants 2 and 3 were placed exparte. Defendants 4 and 5 have adopted the written statement filed by defendant No. 1. Case of the defendants is that, they have entered into an agreement on 17.5.1979 with the owner and were put in possession in part performance of the said agreement. Plaintiff has nothing to do with the suit schedule property and was never put in possession. Defendants also alleged that, there is no relationship of landlord and tenant between the plaintiff and the defendants and the HRC filed by the plaintiff is dismissed and the said order of dismissal is confirmed by this Court in HRRP. He also denied the payment of rent to the plaintiff. Further, the defendants claim that, they are enjoying the possession of the suit schedule property, openly, hostile to the entire world and doing everything in respect of the suit schedule property as owners and have perfected their title by adverse possession.
5. On these pleadings, the trial Court framed the following issues:
(i) Whether the plaintiff is the owner of the suit property?
(ii) Whether the defendant is the tenant of plaintiff in respect of suit property?
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(iii) If so, whether the termination of tenancy is correct and proper?
(iv) Whether the court fee paid is not proper?
(v) Whether the plaintiff is entitled to possession?
(vi) To what order or relief the parties are entitled?
6. Before the trial Court plaintiff got himself examined as PW.1 and got marked Exs.P1 to P10. Defendant No. 1 got himself examined as DW.1 and got marked Exs.D1 to D2 in his evidence. Ex. P.11 and Ex. P.1(a) were marked in the cross examination.
7. On appreciation of evidence, the trial Court decree the suit holding that the plaintiff is the owner of the suit schedule property and further held that the plaintiff is entitled for possession.
8. Sri Ram Mohan, learned Counsel appearing for the appellants submitted that, the owner had entered into an agreement of sale with the deceased Balappa on 17.5.1979 and under the agreement he was put in possession in part performance of the contract. Thereafter, deceased Balappa acted as a landlord and collected rents from the other tenants. From the date of agreement, Balappa had not paid the rents nor defendants have paid any rent. He relied on the order passed in HRC 2169/88 and submitted that, the said case was dismissed by the Small Cause Court holding that, there is no relationship of landlord and tenant. In the said case, the defendants had examined the witnesses who were tenants and who have admitted that, they were paying the rents to the deceased Balappa. He also relied on the order passed by this Court in HRRP No. 1237/93 and submitted that, the order passed in HRC 2169/88 is confirmed by this Court.
9. The specific contention is that, the suit for possession is not maintainable against the defendants unless the plaintiff seeks declaration. The trial Court decreed the suit for possession by holding that the plaintiff is the owner. This order is illegal and contrary to the records. He further submitted that, unless the plaintiff is declared as owner, he does not get title to the property, nor he can seek possession. The suit only for possession is not maintainable as against the defendants. He also submitted that defendants being the agreement holders, they were ready to sue for specific performance and possession cannot be recovered from the defendants. Further submitted that, defendants have perfected their title by adverse possession. Further submitted that, the adverse possession is not against the plaintiff, but against the true owner. He further submitted that, under Section 53A of the Transfer of Property Act, deceased Balappa was put in possession in part performance of the contract and he was in lawful possession and the defendants have succeeded to the said possession. Plaintiff cannot dispossess the defendants. He further submitted that, the decree directing delivery of possession against the defendants only and not against the tenants or the persons claiming under defendants is mutually contradicting to each other. He relied on a decision reported in Page 2059 in the matter of Annamalai Goundan v. Venkatasami Naidu and Ors. and submitted that, the possession of tenant would become that of an agreement holder, moment agreement comes into existence.
10. Sri Ravi Shankar, learned Counsel appearing for the plaintiff submitted that, defendants have not disputed that the vendor of the plaintiff is the real owner. Defendants have also not disputed the registered sale deed. He submitted that, the plaintiff is not required to seek declaration. Plaintiff can maintain the suit for possession based on title under Article 65 of the Limitation Act. He further submitted that, the declaration is sought only when the declaration is necessary under Section 34 of the Specific Relief Act. In this case, the plaintiff being the transferee under a registered document, from the undisputed owner need not required to seek declaration of his title.
11. As regards to part performance of the contract, learned Counsel for the plaintiff submitted that, Ex.P7 is alleged agreement alleged to have been entered between the vendor of the plaintiff and the deceased Balappa. In the entire agreement, there is no reference of the deceased Balappa having been put in possession in part performance of the agreement, not even a whisper that the change of status from that of tenant to the agreement holder. He relied on Section 53A of the Transfer of Property Act and submitted that, a person put in possession in part performance of the contract cannot continue in possession without showing his readiness and willingness to perform his part of contract. He relied on the written statement filed by the defendants and submitted that, not even one word has stated regarding the readiness and willingness to perform their part of contract to avail the benefit of protection under Section 53A of the Act. He pointed out from para 4 and 5 of the written statement and submitted that, not only the defendants have not stated that they are ready and willing to perform their part of contract, in turn, the specific case of the defendants is that, they have become owners under the agreement of sale and further they have perfected their title by adverse possession. Relying on these paras, he submitted that, the contention of the learned Counsel for the defendants that they are put in possession in part performance of the contract, cannot be accepted. He further submitted that, agreement is not concluded contract and it will not confer any title on the defendants under the provisions of Section 54 of the Transfer of Properly Act.
As regards to the suit for possession, he submitted that, Article 65 of the Transfer of Property Act confers right to seek possession based on title and there is no requirement of filing a suit for declaration. He also relied on Section 6 of the Specific Relief Act and submitted that, in case of a person who seeks possession within six months from the date of dispossession, the question of title need not be gone into. In all other cases, the title can Page 2060 be considered by the trial Court and submitted that, the Trial Court holding that the plaintiff is the owner, is in consonance of the provisions of Section 6 of the Specific Relief Act R/W Section 65 of the Limitation Act.
12. In support of his contention, learned Counsel for the plaintiff relied on decision of the Apex Court reported in 1996 (1) SCC 639 and submitted that, "if no specific plea is made as regard to the readiness and willingness to perform part of the contract by the agreement holder, he will not be entitle to retain the possession under Section 53A of the Transfer of Property Act". In connection with the same point, he also relied on another decision
in the matter of Sardar Govindrao Mahadik and Anr. v. Devi Sahai and Ors. and submitted that "Section 53A of the Transfer of Property Act requires that, the person claiming the benefit of part performance must always be shown to be ready and willing to perform his part of the contract, otherwise he will not qualify for the protection of the doctrine of part performance".
13. In connection with the suit for possession based on title, he relied on decision in the matter of
Indira v. Arumugam and Anr. and submitted that, in a suit based on title, only defence available to the defendants, is of adverse possession. Plaintiff cannot be non-suited otherwise. Placing reliance on these decisions and also provisions of Limitation Act and Transfer of Property Act, learned Counsel for the plaintiff submitted that, DW.1 who is defendant No. 1 in his cross examination has categorically admitted that, he has not taken any steps to seek performance of the contract. In turn, he has categorically stated that, they have become owners of the property. He also relied on the evidence of DW.1 to show that, except Ex.P7- agreement, they are no other document or oral understanding. Relying on the evidence of DW.1, he submitted that, neither in the pleading nor in the evidence of DW.1 has stated that, they are ready and willing to perform their part of contract or they have any material to show that they have been put in possession in part performance of the contract. He further submitted that, this Court in HRRP has observed that, the findings given in the said proceedings will not prejudice the suit that may be filed by the parties. Since, the question of relationship was raised in the HRC proceedings, the Court being a Small Cause Court, without going into the question of title, has dismissed the HRC on the ground that there is no relationship of landlord and tenant. The findings in the said proceedings will not preclude to seek possession by filing a regular suit. With these contentions, he supported the findings of the trial Court.
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14. The only point that arises for consideration in this appeal is;
Whether the plaintiff can maintain a suit for possession against the defendants who are claiming to be in possession in part performance of the contract?
15. Facts, which are not in dispute are that, the vendor of the plaintiff is the owner of the suit schedule property. Vendor has executed a registered sale deed in favour of the plaintiff on 22.8.1984. The HRC 2169/88 filed by the plaintiff was dismissed and confirmed by this Court in HRRP 1237/1993. Ex.P7 is an agreement alleged to have been entered into between the deceased Balappa, the father of the defendants and the vendor of the plaintiff on 17.5.1979. Copy of agreement is produced by the appellants-defendants. Nowhere in the agreement there is indication to show that, Balappa was put in possession under the said agreement. However, the contention is raised that, Balappa being the tenant was continued in possession and collected the rent and the original documents were also handed over to Balappa. For the purpose of understanding, as to whether the agreement holder is put in possession in part performance of the contract and can retain the possession for ever. In this case, the plaint transaction is not in dispute. Defendants have not challenged the sale in favour of plaintiff. Section 53A of the Transfer of Property Act protects the possession of an agreement holder who is put in possession in part performance of the contract, subject to showing that, he has performed or he is willing to perform his part of contract. In this case, the defendants in their written statement, nowhere stated that, they are ready and willing to perform their part of contract by paying sale consideration. In turn, at para 5 of the written statement it is stated that, "plaintiff is not the owner of the suit schedule property and that the defendant No. 1 is the absolute owner of the suit schedule property by virtue of an agreement of sale dated 17.5.1979 and by virtue of injunction, the possession of the suit schedule property and denial of title and doing everything in respect of the suit property as the owner of the same, this defendant is the absolute owner of the suit schedule property by virtue of adverse possession".
16. The nature of the contention raised by the defendants in their written statement, clearly shows that, they did not intend to perform their part of contract, in turn the defendants try to set of the adverse possession not only against the plaintiff, but against the entire world including the real owner. Even the defendant No. 1 who has been examined as DW. 1 in his cross examination has stated that, "Except Ex.P7 the agreement, they have no other oral understanding or the document" It is also stated that, no steps have been taken in furtherance with the said agreement either by filing the suit for specific performance or otherwise. It is also claimed that, they have become the real owner with effect from 17.5.1979."
17. DW.1 in his evidence states as under; "I have become the owner of the suit schedule property from 17.5.1979 afterwards, I have never treated Sri Biligiraiah as the owner of the suit property".
18. The agreement holder cannot become the owner by adverse possession. In order to protect possession, even under Section 53A of the Transfer of Page 2062 Property Act, the agreement holder, right from the date of agreement must show his readiness and willingness to perform his part of contract, showing that he has kept himself always ready to perform his part of contract. Readiness is one, which shows his capacity to pay the balance of consideration and perform the other obligations. In this case, when HRC is filed, defence is taken by the defendants that they are not the tenants and they got the HRC dismissed. When the suit is filed for possession, the identical defence is taken by the defendants that the suit is not maintainable for possession unless the plaintiff seeks declaration of his title, despite there being no dispute between the vendor of the plaintiff and the plaintiff. Defendants not only have not filed the suit for specific performance, they have denied the title of original owner. This only indicates the mental attitude of the defendants not to perform their part of contract. A person who is not ready and willing to perform his part of contract, is also not worthy to claim the protection under Section 53A of the Transfer of Property Act.
19. The Trial Court has referred to the several decisions of the Apex Court in the contest of protection under Section 53A of the Transfer of Property Act.
20. In the matter of Sardar Govindrao Manadik and Anr. v. Devi Sahai and Ors. , the Apex Court has observed as
under:
Section 53A of Transfer of Property Act requires that the person claiming the benefit of part performance must always be shown to be ready and willing to perform his part of the contract. And if it is shown that he was not ready and willing to perform his part of the contract, he will not qualify for the protection of the doctrine of part performance.
Similarly, the Apex Court in the Mohan Lal's case at para 6 has observed as under:
Even otherwise, in a suit for possession filed by the respondent, successor-in-interest of the transferor as a subsequent purchaser, the earlier transferee must plead and prove that he is ready and willing to perform his part of the contract so as to enable him to retain his possession of the immovable property held under the agreement.
Under Section 16(c) of the Specific Relief Act, 1963, the plaintiff must plead in the plaint, his readiness and willingness from the date of the contract till date of the decree. The plaintiff who seeks enforcement of the agreement is enjoined to establish the same. Equally, when the transferee seeks to avail of Section 53A to retain possession of the property, which be had under the contract, it would also be incumbent upon the transferee to plead and prove his readiness and willingness to perform his part of the contract. He who comes to equity must do equity. The doctrine of readiness and willingness is an emphatic way of expression to establish that the transferee always abides by the terms of the agreement and is willing to perform his part of the contract. Part performance, as statutory right, is conditioned upon the Page 2063 transferee's continuous willingness to perform his part of the contract in terms covenanted thereunder.
21. Readiness and willingness is not only the requirement contemplated under Section 16(c) of Specific Relief Act, but it is also requirement of Section 53A of the Transfer of Property Act.
22. Readiness and willingness is not only by formal pleading, but it is required to be shown both by capacity as well as by mental attitude. In this case, defendants not only lack the pleading of readiness and willingness, but their case is otherwise of claiming the title by adverse possession.
23. As regards to the suit for possession, admittedly, plaintiff being the owner of the suit schedule property having purchased from the undisputed owner under whom the defendants claim the agreement of sale, undisputedly the tile will pass on to the plaintiff. Plaintiff being the registered owner of the property, under Article 65 of the Limitation Act, the suit based on title is maintainable. The finding of the Trial Court on the issue of title is well within the scope of Article 65 of the Limitation Act and there is no merit in the contention of the learned Counsel for the defendants.
24. Merely because, the defendants collected rents from the other tenants, does not either prove their possession under Section 53A of the Transfer of Property Act, nor is proved any title in them. Neither under Ex.P7- the agreement nor any other evidence shows that the Balappa was put in possession. The decision relied on by the learned Counsel for the defendants reported in AIR 1959 MADRAS 354 shows that, in case of a tenant who is in possession, his possession will become an agreement. It is under these circumstances, where an agreement stipulates that the tenant who is already in possession and who has entered into an agreement, his possession thereafter would be that of the agreement holder. In this case, there is no reference even to the tenancy rights of the defendants in the said alleged agreement nor there is any reference of their prior possession. I do not find that the said decision is applicable to the facts and circumstances of the case. Even otherwise, when they have not shown the readiness and willingness, they are not entitled to claim the benefit under the said provision.
25. The trial Court on appreciation of evidence has found that, the plaintiff is entitled for possession of the suit schedule properly from the defendants. It is alto necessary to notice that, plaintiff filed HRC No. 2169/1988 sought for possession and plaintiff was not able to secure the possession from the defendants. Defendants claiming only under the agreement are trying to prevent the real owner of the property from seeking possession. The defence and the contentions raised is frivolous and unacceptable. I feel it is a proper case for imposing cost also.
Accordingly, appeal is dismissed with cost of Rs. 2,500/-.
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