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Andhra Pradesh High Court
Judges : K.B.SIDDAPPA, K.M.AGARWAL
Akula Madhava Rao - Appellant
Versus
P.Rukminibai - Respondent
L.P.A. No: 124/90
Decided On : 08-08-95
Advocates Appeared :
Mr. M. Suryanarayana Murthy, Mr. C. Balagopal
EVIDENCE ACT, Sec. 92, Provision (1) - Evidence can be let out to show that a sale is sham or nominal - Promissory notes executed by defendants for taking loan from plaintiff Purchaser of Property for payment of sale consideration in respect of reconveyance of property by plaintiff in favour of defendants - Sale of property is a nominal and sham transaction.
HELD: It was the duty of the respondent to place some reliable evidence, apart from the recitals of the sale deed, to prove that the amount mentioned in the document as sale consideration was actually paid by her. It was necessary for the respondent to explain why the sale consideration was not paid in the presence of the Registrar, and also prove payment of consideration privately by production of the alleged receipt given by the vendor, or by production of any other reliable evidence. This she failed to do. Secondly, in her plaint pleadings, the respondent specifically alleged that the appellants were questioning her capacity to raise or possess the huge amount of Rs. 20,000/- so as to enable her to pay the sale consideration. Not only this, in their written statement the appellants reiterated that the respondent had no capacity to pay the sale consideration. Under these circumstances, a duty was cast on the respondent to clear the doubt by cogent evidence about the source from which she supplied the sale consideration. Oral evidence adduced on behalf of the respondent about payment of the sale consideration is worthless, because there also no source is disclosed. The husband of the respondent was examined as P.W.1. He did not say that the sale consideration was provided by him. He admittedly maintained account books, but they were not produced, naturally because the money was not given by him. Under these circumstances, it is doubtful if any consideration was really paid by the respondent for the suit property alleged to have been sold to her.
The plea of the appellants was that the alleged transaction of sale was no sale at all, as it was not intended to be acted upon by the parties. It was alleged to be a nominal and sham transaction whether it was intended to serve the collateral purpose of security for repayment of loan, or was a device to defeat the claim of the plaintiffs partition suit, is immaterial. The main question is whether it was intended to be acted upon by the parties and for deciding that question, all such attending circumstances, which may be helpful in arriving at a just conclusion may be looked into. In other words, though the plea of loan was not raise, there are materials to indicate that it was a loan transaction and those materials are supplied by the respondent herself by her plaint pleadings and the documents executed by her.
There is absolutely no evidence on record to show that the respondent ever exercised ger right of ownership over the suit property ever since the date of her alleged purchase in the year 1969 at any time prior to her notice dated 19.2.1980 and the date of the present suit. She was also not in actual physical possession of the suit property ever since the date of the alleged purchase. The sale deed (Ex.A-1), or the lease deed (Ex.A-2) did not say that the existing tenants would become the tenants of the purchaser, instead the vendor s husband was allowed to collect and appropriate the rent from the existing tenants as his own income. As per plaint pleadings, the respondent had derived knowledge of the partition suit between the family members of the appellants, but she did not intervene during the trial of the suit.
She approached the appellate Court only after the partition suit was decreed, may be at the instance of the appellants. The cumulative effect of all these facts and circumstances is the irresistible conclusion that the sale deed (Ex.A-1) did not represent the real intention of the parties· and that it was not intend to be acted upon by them.
( 1 ) BEING aggrieved by the affirming judgment and decree for declaration of title, possession and mesne profits (i. e. , arrears of rent), passed by a learned single Judge of this Court, the defendants 1 and 2 in the suit, husband and wife by relationship, have preferred this Letters Patent Appeal.
( 2 ) BRIEFLY stated, some of the brothers and/or nephews of the first appellant had on or about 10-10-1968 filed O. S. No. 177 of 1969 for partition of their joint hindu family properties against the appellants and a few others, including the subject matter of the present suit, (in short, the "suit property"), as one of the items of such properties. During the pendency of this partition suit, the three disputed transactions between the parties in the present suit simultaneously came into being on 19-6-1969 in respect of the suit property. The first was a sale deed (Ex. A-1) for a consideration of Rs. 20,000/- by the second appellant in favour of the respondent. The second was a lease deed (Ex. A-2) in favour of the respondent by the first appellant and the third was an agreement to reconvey (Ex. B-l) executed by the respondent in favour of the second appellant. The partition suit was decreed by the trial Court on 3-11-1972, holding the suit property to be one of the properties of the joint family. In CCCA No. 49 of 1973 filed by the present defendants (sic. appellants) 1 and 2, the Respondent (Plaintiff) herein was allowed to be joined as the Respondent No. 14 in that appeal on the basis of her application under Order 1, Rule 10 C. P. C. The appeal was dismissed on2-ll-1976 by a learned single Judge of this Court, whereupon both the parties in the present appeal preferred two separate Letters Patent appeals, bearing Nos. 100 of 1977 and 101 of 1977. Both the appeals were allowed by a common judgment and decree, dated 18-10-1979 passed by a division Bench of this Court. The Division Bench came to the conclusion that the suit property was the separate or self earned property of the second appellant herein and accord ingly dismissed the suit for partition in so far as the suit property, (i. e. , the house site 1-3-1063 and the building thereon), was concerned. The present respondent, thereafter, served the first appellan there in with a notice dated 19-2-1980, calling upon him to pay the arrears of rent for the past period of 3 years at the rate of Rs. 525/- per month and to vacate the suit property by 19-3-1980. After receipt of its reply, the respondent herein filed the present suit for the said reliefs based on the sale deed (Ex. A-1) and the lease deed (Ex. A-2) dated 19-6-1969. The suit was resisted by the present appellants on the ground of want of consideration and on that of the alleged nominal nature of the sale deed, which according to them was not intended to be acted upon by the parties. The suit was decreed. The first. appeal preferred by the defendants in the suit filed. Hence, this Letters Patent Appeal.
( 3 ) BEFORE we embark upon the main question involved in this appeal, let us see the pleadings of the parties. According to the respondent (Plaintiff), she purchased from the second appellant (Second Defendant) the "double storeyed premises bearing Municipal No. 1-3-1063, consisting of a plot of land admeasuring 386 square yards and building constructed thereon which is having a ground floor, first floor and an incomplete second floor, situate at kavadiguda, Hyderabad," (i. e. , the suit property) for a sum of Rs. 20,000/- by a registered sale deed dated 19-6-1969 (Ex. A-l ). On the same day the first appellant (first defendant), who happened to be the husband of the second appellant, took the entire suit property on a monthly rent of Rs. 525/- as per lease deed dated 19-6-1969 (Ex,, A-2x The appellants, thereafter, took a loan of rs. 20,000/- from the respondent by executing two separate pronotes of rs. 10,000/- each and on their request, the respondent agreed to reconvey the suit property in thei
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