2001 Supreme(SC) 1159

2001(6) Supreme 442
SUPREME COURT OF INDIA
(From Madras High Court)
V.N. Khare and B.N. Agrawal, JJ.
Vasantha Viswanathan & Ors. -Appellants
versus
V.K. Elayalwar & Ors. -Respondents
Civil Appeal Nos. 599-600 of 1997
Decided on 24-8-2001
Counsel for the Parties :
For the Appearing Parties : Sudhir Chandra, K. Parasaran, V.T. Gopalan, Sr. Advocates, M.A. Vijayarajan, P. Sreekumar, K.V. Mohan, A.T.M. Sampath, Pradeep Ranjan Tiwary, V. Balaji, J. Srinivasalu, Ms. T.S. Shanthi, S. Mohan, P.N. Ramalingam, S. Srinivasan, V. Sudeer and M.B. Rama Subba Raju, Advocates.

IMPORTANT POINT
The appeals are liable to be dismissed against judgment of High Court decreeing the suit in its entirety with modification in the impugned judgment to the extent only that the plaintiffs shall not be entitled to any interest.

Headnote:(i) Constitution of India-Article 136-Appeal under-Scope-High Court recording a finding of fact after due consideration of material and evidence on record-Whether can be inferred? (No).

       Held : Shri Sudhir Chandra, learned Senior Counsel appearing on behalf of the appellants, in support of the appeal has raised various points. He submitted that the finding of the High Court that the 1st defendant took forceful possession of the vehicles in question is vitiated as all the circumstances have not been taken into consideration while recording the said finding. Shri K. Parasaran, learned Senior Counsel appearing on behalf of the plaintiff-Respondent, on the other hand, submitted that the High Court has recorded the aforesaid finding after taking into consideration all the relevant materials. We have been taken through the judgment and we find that it is not possible to interfere with the finding as the High Court has taken into consideration the entire evidence adduced on behalf of the parties and the circumstances before recording the said finding. Shri Sudhir Chandra made an attempt in vain for reappraisal of evidence by this Court on the said question, but since we have already held that the said finding has been arrived at by the High Court after taking into consideration all the relevant materials, it is not possible to accede to the prayer. (Para 9)

       (ii) Sale of Goods Act, 1930-Section 19-Passing of property when intended to pass-Motor Vehicles Act, 1988-Section 31-Entry to transfer in registration certificate-Effect-Transfer of property under Ex A-1 and A-2-Possession taken-Sale price not paid nor formalities fulfilled-Whether there was transfer of property? (No).

       Held : The transfer is not effected under Section 31 of the Motor Vehicles Act, 1939, but the same simply prescribes procedure for entering the factum of transfer in the registration certificate, which is an act posterior to the transfer. The transfer of vehicles in question would be governed by the provisions of Section 19 of the Sale of Goods Act according to which property in the vehicle would pass to defendant No. 1 at such time as the parties to the contract intend it to be transferred. Thus the passing of property in the goods would be dependent upon the intention of the parties as evidenced from the contract. From the contract, Exhibits A-1 and A-2, it would appear that the parties intended that after the registration formalities were completed, price of the vehicles covered by the permits would be ascertained and thereafter the same would be paid by the 1st defendant, entitling him to take possession of the vehicles. Thus the parties intended that property in the vehicles shall pass only after possession of the vehicles was delivered to the 1st defendant after completion of all the aforesaid formalities. In the present case, after registration formalities were completed, the value of the vehicles covered by the permits was not ascertained, much less paid, rather, on the other hand, possession was forcibly taken by the 1st defendant. Therefore, property in the vehicles did not pass to the 1st defendant as required under Section 19 of the Sale of Goods Act. As the 1st defendant had illegally taken possession of the vehicles which he was not entitled to ply, it has been rightly held by the High Court that the plaintiff would be entitled to profits earned by the 1st defendant and defendant Nos. 4 to 7 from plying of the vehicles. (Para 10)

       (iii) Motor Vehicles (Tamil Nadu Second Amendment) Act, 1971 in Motor Vehicles Act, 1939-Section 48A-When permit to be treated as benami-Plea taken for the first time before Apex Court-Whether can be allowed? (No).

       Held : The question of benami was not pleaded by any of the defendants in the written statement and neither any issue framed nor raised before the trial Court or before the High Court. Therefore, it is not possible to allow the defendants to raise the same, for the first time, before this Court, especially when it is not a pure question of law. (Para 11)

       (iv) Contract Act, 1872-Sections 23 & 24-Unlawful agreement is void-Tamil Nadu Motor Vehicles Rules-Rule 199-Trafficking in M.V. permits prohibited under-Plaintiff doing it-In written statement plea taken it was illegal and opposed to public policy-No issue framed-No evidence led-Whether defendants can be allowed to raise the same? (No).

       Held : Shri Sudhir Chandra next submitted that the plaintiff was carrying on business of sale of permits which amounted to trafficking in permits and the same is prohibited by Rule 199 of Tamil Nadu Motor Vehicles Rules, and as such the agreement in question for sale of 5 permits at a price to be ascertained was unlawful within the meaning of Section 23 of the Indian Contract Act, 1872 and accordingly it would be void in view of the provisions of Section 24 of the Indian Contract Act, 1872. In the written statement filed by the 1st defendant as well as the other defendants it has been simply stated that sale of permit was illegal and opposed to public policy. In the pleadings there is no whisper that the plaintiff was carrying on business of sale of permits. No issue was framed on this question in the trial Court and no evidence was led by the defendants. The only question that was raised was that the agreement to sell permits was illegal as the plaintiff wanted to circumvent the provisions of law which were likely to be introduced soon fixing a ceiling of permit on individual. This question was raised for the first time before the High Court, which has recorded a finding, as stated above, that the agreement was not invalid. The question whether the plaintiff was trafficking in permits is not a pure question of law, but is a mixed question of fact and law both and for deciding the question of law, facts have to be first established by evidence. As in the present case, there was neither any pleading on this question nor any issue framed or evidence led, it is not possible to allow the defendants to raise the same. (Para 12)

       (v) Transfer of Property Act, 1882-Section 52-Sale of Goods Act, 1930-Section 58-SpecificRelief Act, 1877-Section 18(b)-Indian Trust Act, 1882-Section 91-Question whether defendants 4 to 7 were bona fide purchaser for value without notice-High Court passing a decree against them also-Whether justified? (Yes).

       Held : The further submission of Shri Chandra is that in any view of the matter, the High Court was not justified in passing a decree against defendant Nos. 4 to 7 as there was no privity of contract between them and the plaintiff. The High Court has recorded a categorical finding that these defendants were not bona fide purchasers and had notice of the agreement between the plaintiff and the 1st defendant which finding has not been assailed before this Court. Learned Senior Counsel appearing on behalf of both the parties are in agreement that the High Court was not justified in holding that the present case would be governed by Section 52 of the Transfer of Property Act as the same applies to immovable property alone and not to movable. Section 58 of the Sale of Goods Act expressly lays down that subject to the provisions of Chapter II of the Specific Relief Act, 1877, in a suit for breach of contract to deliver specific or ascertained goods, the court may, if it thinks fit, on the application of the plaintiff, by its decree direct that the contract shall be performed specifically, without giving the defendant the option of retaining the goods on payment of damages. It further lays down that decree may be unconditional, or upon such terms and conditions as to damages, payment of price, or otherwise, as the court may deem just and the application of the plaintiff may be made at any time before the decree. Section 19(b) of the Specific Relief Act, 1877, which occurs in Chapter II, applies to moveables by virtue of the provisions of Section 58 of the Sale of Goods Act referred to above. Under Section 19(b) a specific performance of a contract can be enforced not only against either party thereto but against any other person claiming under him by a title arising subsequently to the contract, except a transferee for value who has paid his money in good faith and without notice of original contract. Further, Section 91 of the Indian Trusts Act, 1882 lays down that where a person acquires property with notice that another person has entered into an existing contract affecting that property, of which a specific performance could be enforced, the former must hold the property for the benefit of the latter to the extent necessary to give effect to the contract. Defendant nos. 4 to 7 had notice of the contract between the plaintiff and the 1st defendant and they were not bona fide purchasers, therefore, in view of the provisions referred to above, we are of the view that the High Court was quite justified in passing a decree against them as well. (Para 13)

       (vi) Civil Procedure Code, 1908-Order 41 Rule 27-Prayer for additional evidence-Rejected by High Court-Whether correct? (Yes).

       Held : Shri Chandra then submitted that the High Court was not justified in rejecting the prayer for additional evidence. The document sought to be brought on record by additional evidence, was the joint application filed on behalf of the plaintiff and the 1st defendant before the Regional Transport Authority. High Court has refused the prayer on the ground that the said document was not put to the plaintiff when he was deposing as a witness in the suit. Further ground for refusal of the prayer by the High Court was that the copy produced was not a certified copy as there was neither any seal of the court nor certificate of endorsement and on the face of the document it was copy of a true copy issued by the Regional Transport Officer. Shri Chandra could not point out any infirmity in the judgment of the High Court refusing the prayer for additional evidence on the aforesaid grounds. (Para 14)

       (vii) Award of interest in decree-Agreement stipulating no interest on failure to pay-High Court awarding 12 p.a. in decree-Whether proper? (No)-Appeal dismissed with modification of deletion of interest.

       Held : The last submission of Shri Chandra is that in any view of the matter the High Court was not justified in awarding 12 interest per annum. In the documents, Exhibits A-1 and A-2, there is nothing to show that in case of failure by the 1st defendant to pay the price, the plaintiff would be entitled to any interest. In view of the said fact and in the facts and circumstances of the case, we are of the view that the High Court was not justified in awarding interest. In the result, the appeals are dismissed with modification in the impugned judgment to this extent only that the plaintiff shall not be entitled to any interest. In the circumstances of the case, there shall be no order as to costs. (Paras 15 & 16)