Under provisions of Section 51 of the said Act, a person making improvements in the property should have acted believing in good faith that he is absolutely entitled to the property. What actions are taken believing in good faith would depend on the facts of each case and hence, the importance of necessary pleadings in that regard. A general belief that the party was a bona fide purchaser for valuable consideration without any further details would not suffice the requirements of making out a case for grant of compensation under Section 51 of the said Act. Hence, the absence of pleadings that the defendant No. 3 believed in good faith that she was absolutely entitled to the property is a big handicap in her effort to seek compensation under Section 51 of the said Act.
9. The evidence on record led by the defendant No. 3 who was the purchaser of the suit property indicates that before executing the sale deed in favour of the defendant No. 3, no public notice came to be issued. It was also admitted that neither he nor the defendant No. 3 were present when the sale deed was executed. He further admitted that after receiving the telegram at Exhibit-52 from the plaintiff, no attempt was made to contact the plaintiff nor was any enquiry made in the office of the Sub Registrar with regard to the plaintiff's sale deed.
10. In Bajrang @ Hanumant Tatyaba Kakade (supra), the test that has to be applied to find out if the purchaser acted bona fide and took reasonable care and caution in making enquiry into the title of the property has been referred to. In paras 5 and 6 of said decision, it has been observed thus:
"5............................................................ The oft quoted and well known passage is reiterated in Bailey v. Barnes, (1984) 1 Ch. 25, 35 which aptly describes the obligation of the vendee before the purchase and that reads thus :
"A purchaser of property is under no legal obligation to investigate his vendor's title. But in dealing with real property, as in other matters of business, regard is had to the usual course of business; and a purchaser who wilfully departs from it in order to avoid acquiring a knowledge of his vendor's title is not allowed to derive any advantage from his wilful ignorance or defect which would have come to his knowledge if he had transacted his business in the ordinary way."
6. The aforesaid is the test which has to be applied to find out whether the purchaser acted bona fide and took reasonable care and caution in making usual enquiry into the title. If he succeeds in showing that even if he had transacted the business in ordinary way he was not in a position together that there was none other owner than the vendors, then, such vendee could be described as bona fide purchaser. On the other hand, if while transacting the business in the ordinary way the vendee would have come to know that there were owners other than the vendor, it cannot be said that such vendee has acted bona fide".
If the evidence led by the defendant No. 3 is tested on the aforesaid touchstone, the same falls short for holding that the defendant No. 3 had acted believing in good faith and had taken reasonable care and caution before purchasing the property.
IN THE HIGH COURT OF BOMBAY (NAGPUR BENCH)
Second Appeal No. 317 of 2014
Decided On: 31.07.2017
Maya Namdeorao Kharodkar Vs. Bhagyashree Pramod Dave and Ors.
Hon'ble Judges/Coram:
A.S. Chandurkar, J.
Citation: 2018(1) MHLJ 150
1. In view of notice for final disposal issued earlier, the learned Counsel for the parties have been heard on the following substantial question of law:
"Whether the defendant No. 3 has proved that she was a bona fide purchaser of the suit property on 15th April, 1998 and has satisfied the ingredients of Section 51 of the Transfer of Property Act, 1882 for being entitled for any relief?"
2. The facts giving rise to this second appeal are that the respondent No. 2 herein - defendant No. 1 was the owner of the suit property which is plot bearing No. 12 admeasuring about 2700 sq.ft. On 29-11-1994, the respondent No. 1 herein - original plaintiff purchased this plot from the defendant No. 1 for consideration of Rs. 75,000/-. On account of the fact that the plaintiff's husband was in service the plaintiff travelled with her husband from place to place outside Amravati. On 14-7-2001 when the plaintiff and her husband visited the suit property, they found the appellant - defendant No. 3 in possession thereof. On 15-7-2001, the plaintiff issued a telegram to the defendant No. 3 to stop the construction work undertaken by her. She then approached the defendant No. 1 who was her vendor. After making further enquiries it was found that on 21-8-1996 the defendant No. 1 had sold the suit property to the defendant No. 2. Thereafter on 15-4-1998, the defendant No. 2 sold the suit property to the defendant No. 3. In aforesaid facts, the plaintiff on 15-12-2001 filed suit for declaration that the sale deed dated 21-8-1996 and 15-4-1998 were null and void and did not confer title on defendant No. 3. She sought vacant possession of the suit property along with a prayer for mandatory injunction that the construction made by the defendant No. 3 be directed to be demolished.
3. The defendants filed their written statement. The defendant No. 1 took the stand that the sale deed in favour of the plaintiff was a nominal document. The defendant No. 2 in his written statement pleaded that after making due enquiries, he had purchased the suit property from the defendant No. 1. The defendant No. 3 filed reply to the application for temporary injunction that was moved by the plaintiff and in that reply a stand was taken that she was a bona fide purchaser for valuable consideration having purchased the same from the defendant No. 2. It was pleaded that initially the defendant No. 3 had purchased plot No. 11 and thereafter the suit plot which was adjoining. It was further pleaded that after obtaining a loan, the defendant No. 3 had started construction on both the plots. The defendant No. 3 adopted this reply as her written statement.
4. After the parties led evidence, the trial Court held that the plaintiff had proved that she was the owner of the suit plot by virtue of sale deed dated 29-11-1994. It was further held that the defendant No. 2 was not a bona fide purchaser and that the defendant No. 3 had no title to the said plot. Accordingly, on 22-12-2006 the trial Court decreed the suit and directed the defendant No. 3 to deliver vacant possession to the plaintiff by the end of March, 2007. The sale deeds in favour of the defendant Nos. 2 & 3 were declared to be null and void.
5. The appeal preferred by the defendant No. 3 was also dismissed on 11-3-2014 after recording finding that the defendant No. 3 was not entitled for any compensation as claimed under Section 51 of the Transfer of Property Act, 1882 (for short, the said Act). Being aggrieved the defendant No. 3 has filed this appeal.
6. Shri A.M. Sudame, learned Counsel for the appellant submitted that though it was claimed by the plaintiff that she had purchased the suit plot on 29-11-1994, her name was not mutated in the revenue records. The defendant No. 3 who was already the owner of plot No. 11 made necessary enquiries and on being satisfied of the title of the defendant No. 2 purchased the adjoining plot from the defendant No. 2 on 15-4-1998. She had thereafter undertaken construction work after the amalgamation of both the plots. The entire action of the defendant No. 3 was in good faith and as it had now been found that the plaintiff had better title than the defendant No. 3, she was entitled for compensation in terms of Section 51 of the said Act. It was also urged that the plaintiff was never in possession of the suit property nor had she acted as a prudent owner of the same. The learned Counsel in support of his submissions placed reliance upon the decisions in Lachmi Prasad v. Lachmi Narain and another MANU/UP/0322/1927 : AIR 1928 Allahabad 41, Kausabai v. Gayabai MANU/MH/0736/2010 : 2010 (4) Mh.L.J. 46, and R.V.E. Venkatachala Gounder v. Arulmigu Viswesaraswami and V.P. Temple and anr. MANU/SC/0798/2003 : (2003) 8 SCC 752. It was, therefore, submitted that the defendant No. 3 was entitled to be duly compensated in law.
7. Per contra, Shri J.T. Gilda, learned Counsel for the respondent No. 1 vehemently opposed the aforesaid submissions. At the outset, he submitted that there were no pleadings with regard seeking any benefit of the provisions of Section 51 of the said Act at the instance of the defendant No. 3. He submitted that in the reply to the application for temporary injunction at Exhibit-19, it was merely stated that the defendant No. 3 was a bona fide purchaser for valuable consideration. In para 5 of the said reply, it was stated that the defendant No. 3 be permitted to complete the construction and that she would abide by the final decision in the proceedings. According to him, though the application for temporary injunction had been rejected, the defendant No. 3 continued with the construction at her own risk. Referring to the deposition of the defendant No. 2 it was submitted that no public notice was ever issued before the defendant No. 3 purchased the suit property. In any event, it was submitted that the requirements of Section 51 of the said Act had not been met so as to enable the defendant No. 3 to claim any benefit there from. To buttress his submission, the learned Counsel placed reliance on the following decisions Daya Ram and others v. Shyam Sundari and others MANU/SC/0298/1964 : AIR 1965 SC 1049, R.S. Maddanappa v. Chandramma MANU/SC/0356/1965 : AIR 1965 SC 1812, Ramaji Batanji v. Manohar Chintaman and others A MANU/MH/0044/1961 : AIR 1961 Bombay 169, Bajrang @ Hanumant v. Babubai & others MANU/MH/0403/1997 : 1997(2) Mh.L.J. 855, Subaitha Beevi v. Mrs. Yvonn Thambi and another A I H C 3763 and Smt. Vasanthamma v. Siddaveerappa & ors MANU/KA/0749/2010 : AIR 2011 Karnataka 54. It was thus, submitted that there was no merit in the appeal
8. I have heard the learned Counsel for the parties at length and I have perused the records of the case. It has been found by both the Courts that the plaintiff had proved her title on the basis of sale deed dated 29-11-1994 (Exhibit-51) executed by the defendant No. 1. The record further indicates that the defendant No. 3 in para No. 3 of her reply to the application for grant of temporary injunction (Exhibit-19) had stated that after making due enquiries and by verifying the documents of title deeds, she had purchased the suit property and was thus, a bona fide purchaser for valuable consideration. There is no plea taken in the said reply with regard to seeking benefit of the provisions of Section 51 of the said Act. This fact has been noted even by the first appellate Court and thereafter it proceeded to consider the aforesaid aspect of the matter. Under provisions of Section 51 of the said Act, a person making improvements in the property should have acted believing in good faith that he is absolutely entitled to the property. What actions are taken believing in good faith would depend on the facts of each case and hence, the importance of necessary pleadings in that regard. A general belief that the party was a bona fide purchaser for valuable consideration without any further details would not suffice the requirements of making out a case for grant of compensation under Section 51 of the said Act. Hence, the absence of pleadings that the defendant No. 3 believed in good faith that she was absolutely entitled to the property is a big handicap in her effort to seek compensation under Section 51 of the said Act.
9. The evidence on record led by the defendant No. 3 who was the purchaser of the suit property indicates that before executing the sale deed in favour of the defendant No. 3, no public notice came to be issued. It was also admitted that neither he nor the defendant No. 3 were present when the sale deed was executed. He further admitted that after receiving the telegram at Exhibit-52 from the plaintiff, no attempt was made to contact the plaintiff nor was any enquiry made in the office of the Sub Registrar with regard to the plaintiff's sale deed.
10. In Bajrang @ Hanumant Tatyaba Kakade (supra), the test that has to be applied to find out if the purchaser acted bona fide and took reasonable care and caution in making enquiry into the title of the property has been referred to. In paras 5 and 6 of said decision, it has been observed thus:
"5............................................................ The oft quoted and well known passage is reiterated in Bailey v. Barnes, (1984) 1 Ch. 25, 35 which aptly describes the obligation of the vendee before the purchase and that reads thus :
"A purchaser of property is under no legal obligation to investigate his vendor's title. But in dealing with real property, as in other matters of business, regard is had to the usual course of business; and a purchaser who wilfully departs from it in order to avoid acquiring a knowledge of his vendor's title is not allowed to derive any advantage from his wilful ignorance or defect which would have come to his knowledge if he had transacted his business in the ordinary way."
6. The aforesaid is the test which has to be applied to find out whether the purchaser acted bona fide and took reasonable care and caution in making usual enquiry into the title. If he succeeds in showing that even if he had transacted the business in ordinary way he was not in a position together that there was none other owner than the vendors, then, such vendee could be described as bona fide purchaser. On the other hand, if while transacting the business in the ordinary way the vendee would have come to know that there were owners other than the vendor, it cannot be said that such vendee has acted bona fide".
If the evidence led by the defendant No. 3 is tested on the aforesaid touchstone, the same falls short for holding that the defendant No. 3 had acted believing in good faith and had taken reasonable care and caution before purchasing the property.
11. The plea as raised by the defendant No. 3 with regard to absence of mutation entries in the name of the plaintiff cannot further her case inasmuch as the mutation entries are taken for fiscal purposes and cannot be treated as documents of title. Merely on the ground that the plaintiff had not got any mutation entry made in her favour pursuant to purchasing the suit property would not dispense with the necessary enquiries that are required to be made by a purchaser who believes in good faith that he is absolutely entitled to the same. The expressions "believing in good faith" and "absolutely" entitled indicate the nature of enquiries required to be undertaken by a purchaser who seeks to rely upon the provisions of Section 51 of the said Act. As noted above, the husband of the defendant No. 3 in his deposition admitted that they had not responded even to the telegram issued by the plaintiff which inaction was not expected of a bona fide purchaser. In aforesaid facts, therefore, the decisions relied upon by the learned Counsel for the appellant do not support the case of the defendant No. 3.
12. Thus, from the aforesaid, I find that the defendant No. 3 failed to lead any evidence whatsoever so as to satisfy the ingredients of Section 51 of the said Act for being entitled to the relief of compensation. It is to be noted that in the reply to the application for temporary injunction the defendant No. 3 took the stand that she be permitted to go ahead with the construction which was to be subject to final decision of the suit. The substantial question of law as framed is answered against the appellant. Consequently, the appeal is liable to be dismissed. Accordingly, the second appeal stands dismissed with no order as to costs.
13. At this stage, the learned Counsel for the appellant seeks continuation of the interim relief that was granted while issuing notice.
14. As interim protection was operating since 25-07-2014, the same shall continue to operate for a period of six weeks from today. It shall cease to operate automatically thereafter.
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