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1973 Supreme(Raj) 126
Rajasthan High Court
S. N. MODI
Asharam - Appellant
Versus
Bhanwarlal - Respondent
Second Appeal No. 557 of 1966
Decided On : 08/28/1973
A.L. Mehta, for Appellants; Ganpatsingh Mehta, for Respondent.
A subsequent transferee is deemed to have notice of the title of any person who is for the time being in actual possession thereof.
Headnote:
TRANSFER OF PROPERTY ACT - SECTION 53-A - PART PERFORMANCE - NOTICE TO SUBSEQUENT TRANSFEREE - BURDEN OF PROOF - SECTION 3 - DEFINITION OF NOTICE - CONSTRUCTIVE NOTICE - IMPLIED NOTICE - NOTICE TO AGENT - SUBSEQUENT TRANSFEREE DEEMED TO HAVE NOTICE OF TITLE OF DEFENDANT IN POSSESSION - TITLE INCLUDES RIGHT ARISING OUT OF PART PERFORMANCE.
Fact of the Case:
Plaintiffs filed a suit for redemption of a usufructuary mortgage. The defendant claimed that he was entitled to the benefit of the doctrine of part performance under Section 53-A of the Transfer of Property Act due to an agreement to sell the property to him. The plaintiffs argued that the defendant failed to prove that the subsequent transferee had notice of the agreement.
Finding of the Court:
The court held that the subsequent transferee, plaintiff No. 2, must be taken to have implied notice of the agreement dated 18-6-1948 and of the part performance thereof because he would have had actual notice as to the title of the defendant but for his wilful abstention from an enquiry at the time of purchasing the property which was admittedly in possession of the defendant.
Issues: Whether the burden of proving that the subsequent transferee had notice of the prior contract lay on the defendant.
Ratio Decidendi: The court relied on Section 3 of the Transfer of Property Act, which defines the expression "a person is said to have notice." The court held that the subsequent transferee is deemed to have notice of the title of any person who is for the time being in actual possession thereof. The court also held that the subsequent transferee cannot be heard to deny notice of the title of the defendant under which the latter held the property.
Final Decision: The appeal was dismissed with costs.
JUDGEMENT :- This is a second appeal by the plaintiffs Asharam and Kishanlal in a suit for redemption. Both the courts below have dismissed the suit.
2. The relevant facts lie within a narrow compass and they are stated as follows : The property in suit was owned by plaintiff No. 1 Asharam. In Smt. year 2003 he borrowed a sum of Rs. 300/- from the defendant-respondent and executed a usufructuary mortgage of the suit property in security thereof. Subsequently, by a deed dated 9-5-1949 the suit property was sold by Asharam to plaintiff No. 2 Kishanlal. On 24-8-1964 the plaintiff-appellants brought a suit for redemption of the mortgage alleging that the defendant had declined to redeem the mortgage. The defendant-respondent resisted the suit and alleged that subsequent to the mortgage, by agreement dated 18-6-1948 (Jeth Sudi 12, Smt. year 2004), plaintiff No. 1 Asharam agreed to sell the said property to him for Rs. 850/- and after adjusting the mortgage amount of Rs. 300/-, he (defendant) (plaintiff ?) received Rupees 550/- in cash from him (plaintiff No. 1) (defendant ?). Both the Courts below have held that the agreement dated 18-6-1948 entitled the defendant to the benefit of doctrine of part performance and dismissed the suit. Hence this appeal.
3. Mr. A.L. Mehta, the learned advocate for the appellants, urges that the courts below have overlooked the proviso to Section 53-A of the Transfer of Property Act which reads as under :-
"Provided that nothing in this section shall affect the rights of a transferee for consideration who has no notice of the contract or of the part performance thereof."
It is alleged that mere proof of fact that on account of the agreement to sell, the character of the defendant's possession changed from that of a mortgagee to that of a purchaser was not sufficient to attract the doctrine of part performance contained in Section 53-A of the Transfer of Property Act. In order to disentitle the plaintiffs to the relief of redemption it was further necessary for the defendant to prove that the subsequent transferee, namely, plaintiff No. 2 had notice of the agreement dated 18-6-1948. It is urged that since the defendant failed to discharge that burden, the courts below committed a gross error in dismissing the plaintiff's suit. Mr. A.L. Mehta in support of his above contention has placed reliance on Malla Sasirekhamma v. Garbham Suramma, AIR 1952 Orissa 163 and Smt. Prova Rani Adhikari v. Smt. Lalit Mohini Mitra, AIR 1960 Cal 541.
4. I have heard learned counsel for the parties and, in my opinion, there is no substance in the above contention. The cases cited by Mr. A.L. Mehta do not help him. In none of the cases cited by him it was specifically laid down that the burden of proving that the subsequent transferee had notice of the prior contract lay on the defendant. Apart from that, it appears that the attention of the learned Judges who decided those cases was not invited to the provision of Section 3 of the Transfer of Property Act. Section 3 of the said Act defines the expression "a person is said to have notice. This definition reads as under :-
""A person is said to have notice" of a fact when he actually knows that fact, or when, but for wilful abstention from an inquiry or search which he ought to have made, or gross negligence, he would have known it."
Explanations II and III to the above definition run as under :-
"Explanation II. - Any person acquiring any immovable property or any share or interest in any such property shall be deemed to have notice of the title, if any, of any person who is for the time being in actual possession thereof.
Explanation III. - A person shall be deemed to have had notice of any fact if his agent acquires notice thereof whilst acting on his behalf in the course of business to which that fact is material.
Provided that, if the agent fraudulently conceals the fact, the principal shall not be charged with notice thereof as against any person who was a party to or ot
