Whether stranger to a deed can impeach the deed as void and invalid on all possible grounds?

  Learned Counsel for defendant No. 1 contended that since the plaintiff had filed the suit on the basis of sale deed, executed by defendant No. 2 in his favour and had sought possession over that property from defendant No. 1, it was open to the latter to show that plaintiff had no title to the property in suit and, therefore, the suit was liable to be dismissed. It was contended that in his capacity as a defendant in the suit, it was open to defendant No. 1 to raise all the pleas on the basis of which the suit could be defeated. {Para 18}

19. In Lal Achal Ram v. Raja Kazim Hussain Khan (1905) 32 IA 113, the Privy Council laid down the principle that a stranger to a sale deed cannot dispute payment of consideration or its adequacy. This decision has since been considered by various High Courts and a distinction has been drawn between a deed which was intended to be real or operative between the parties and a deed which is fictitious in character and was never designed as a genuine document to effect transfer of title. In such a situation, it would be open even to a stranger to impeach the deed as void and invalid on all possible grounds. This was also laid down in Kamini Kumar Deb v. Durga Charan Nag and Ors. AIR (1923) Cal. 521 and again in Saradindu Mukherjee v. S.M. Kunja Katnini Roy and Ors. MANU/WB/0159/1942 : AIR1942Cal514 . The Patna High Court in Jugal Kishore Tiwari and Anr. v. Umesh Chandra Tiwari and Ors. MANU/BH/0116/1973 : AIR1973Pat352 and the Orissa High Court in Sanatan Mohapatra and Ors. v. Hakim Mohammad Kazim Mohammad and Ors. MANU/OR/0061/1977 : AIR1977Ori194 have also taken the same view.

20. The above decisions appear to be based on the principle that a person in his capacity as a defendant can raise any legitimate plea available to him under law to defeat the suit of the plaintiff. This would also include the plea that the sale deed by which title to the property was intended to be conveyed to plaintiff was void or fictitious or, for that matter, collusive and not intended to be acted upon. Thus, the whole question would depend upon the pleadings of the parties, the nature of the suit, the nature of the deed, the evidence led by the parties in the suit and other attending circumstances. For example, in a landlord-tenant matter where the landlord is possessed of many properties and cannot possibly seek eviction of his tenant for bona fide need from one of the properties, the landlord may ostensibly transfer that property to a person who is not possessed of any other property so that that person, namely, the transferee, may institute eviction proceedings on the ground of his genuine need and thus evict the tenant who could not have been otherwise evicted. In this situation, the deed by which the property was intended to be transferred, would be a collusive deed representing a sham transaction which was never intended to be acted upon. It would be open to the tenant in his capacity as defendant to assert, plead and prove that the deed was fictitious and collusive in nature. We, therefore, cannot subscribe to the view expressed by the Privy Council in the case of Lal Achal Ram (supra) in the broad terms in which it is expressed but do approve the law laid down by the Calcutta, Patna and Orissa High Courts as pointed out above.

IN THE SUPREME COURT OF INDIA

C.A. No. 1534 of 1999

Decided On: 17.03.1999

Vidhyadhar  Vs.  Manikrao and Ors.

Hon'ble Judges/Coram:

Saiyed Saghir Ahmad and D.P. Wadhwa, JJ.

Author: Saiyed Saghir Ahmad, J.

Citation: AIR 1999 SC 1441,MANU/SC/0172/1999

Print Page

Whether recitals made in sale deed will prevail over averments made in objection petition?

In re : whether sale was for legal necessity, and thus binding :

83. It was submitted that sale was for legal necessity for benefit of estate. It has been averred in the objections preferred by the purchasers that sale was made by Hamid Ali Khan, defendant No.1, for payment of land revenue. Thus it was contended that the payment of land revenue has enured for the benefit of the entire estate. Thus sale would be valid and binding on co-heirs. Except making the aforesaid bald statement, nothing has been placed on record to indicate that the sale was for payment of land revenue. On the other hand, when we peruse the sale deed, recital of it makes it clear that the sale was effected by Hamid Ali Khan for his ‘personal necessity’. He had not executed the sale deed for payment of land revenue as its recital is otherwise which would prevail. Nor the sale deed had been executed in the fiduciary capacity acting on behalf of co-sharers rather he has claimed in the sale deed that he was the exclusive owner of 68 acres 10 guntas area of property and was in possession thereof. He had sold the land for a consideration of Rs.2000 in view of his personal necessity. The sale was made after taking permission from the Deputy Collector Division, Distt. West, Hyderabad. Thus, the sale deed negates the aforesaid bald averment made in the objection petition. Even otherwise under the Mohammedan Law, it was not open to Hamid Ali Khan, defendant No.1 to act in fiduciary capacity to sell the property and bind shares of others. It is not mentioned in sale deed that Hamid Ali Khan had sold for any legal necessity or for the benefit of the entire estate. The recital in sale deed has the evidentiary value and Bala Mallaiah and his successors are bound by what has been mentioned therein. Thus, no case is made out on the basis of the aforesaid submission also to make an interference.

Reportable
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NOS.4731-4732 OF 2010
T. Ravi & Anr. Vs. B. Chinna Narasimha & Ors. etc.
Dated: 21 MARCH 2017

Print Page

Whether any document can be interpreted on the basis of conduct of party even though there is no recital to that effect in the deed?

 Further, the argument that possession of the property was delivered immediately after the deed was executed also cannot be a ground to hold that mortgagee was in possession of the land in question as per the deed as there is no recital in the deed which delivers possession of the land to the mortgagee under the deed. In the case of Ramkishorelal & Anr. v. Kamal Narayan[3], it was held that the course of conduct of the parties is of no relevance for the construction of a document which is in itself, unambiguous. In the present case, the mortgage deed is unambiguous and it is patently clear that the mortgagor did not intend to deliver possession of the mortgaged property as he has clearly mentioned that he is paying interest but there is no delivery of possession of land as per the deed.

Supreme Court of India

Mathai Mathai vs Joseph Mary @ Marykkutty Jopseph & ... on 25 April, 2014

Bench: Gyan Sudha Misra, V. Gopala Gowda

Citation;(2015) 5 SCC 622

Print Page

When deed assigning property at the time of dissolution of partnership firm is liable to be stamped?

The essential distinction hence is in looking at whether there is an allotment of the surplus assets, on dissolution, amongst the partners. If that is so, the partners who owned the assets together, during the existence of the partnership, had a right to share in the business in accordance with their shares. On dissolution and allotment of the remaining assets, even if there is immovable property, each goes with his share, not creating any new right. But when there is an assignment in favour of one or other and consideration is passed then it creates new rights on the immovable property. A deed creating such rights would have to be registered compulsorily and the creation of such right is a "release" under Article 48(b) to be stamped accordingly.

Equivalent Citation: 2015 (3) KHC 752

IN THE HIGH COURT OF KERALA

W.P. (C) No. 34751 of 2008

Decided On: 22.06.2015

Vinayakrishnan M.C. Vs.Commissioner for Land Revenue and Ors.

Hon'ble Judges/Coram:K. Vinod Chandran, J.

Print Page