2018 Supreme(Mad) 4289

IN THE HIGH COURT OF JUDICATURE AT MADRAS
V.K. TAHILRAMANI, M. DURAISWAMY, JJ.
Minor S. Kasilingam S/o Mr. A.V.R. Sekhar – Petitioner
Versus
The Chair Person Debts Recovery Appellate Tribunal – Respondent
W.P. No. 32871 of 2014, M.P. No. 1 of 2014
Decided On : 29-11-2018

Headnote:

Transfer of Property Act, 1882 - Section 43 - Quashing of order - Suit for mortgage deed - Bank filed on file of Debts Recovery Tribunal Chennai for recovery of a sum of together with future interest - Respondent-partnership firm represented by respondents obtained loan from respondent bank - One who was defendant in Original Application stood as a guarantor for said loan - Loan was obtained by respondents and guarantor executed equitable mortgage in respect of his property on same day - Writ Petitioners who are defendants and who are grand sons of contended that their grand-father had executed a settlement deed in respect of mortgaged property itself and therefore a charge cannot be created in respect of said property - It is pertinent to note that guarantor had died - It is also brought to notice of this court that settlement deed was cancelled by - Writ Petitioners also contended that a Will was also executed in their favour by said - Therefore they are absolute owners of property - But this contention cannot be accepted for reason that Will executed was came into force only after death of testator viz. whereas mortgage was executed as early as in favour of respondent-bank - Execution of settlement deed by gam and thereafter executing mortgage deed in favour of respondent-bank is only to defraud respondent bank - Respondent-bank was made to believe that said is absolute owner of property and therefore he was allowed to be guarantor for loan sanctioned to respondents - Provisions of Section 43 of Transfer of Property Act squarely applies to facts of present case - Guarantor had created mortgage within days from date of execution of settlement deed in favour of petitioners and their father - Respondent-bank who are dealing with public money cannot be allowed to go remedy less - Could have denied there own title in gifted property qua donees or could they have disputed their title vesting in donees by deed of gift? - Whether defect of title in transferor arises by reason of his having no interest whatsoever in property or of his interest therein being that of an expectant heir - Held, Sole point for determination in this appeal is whether a transfer of property for consideration made by a person who represents that he has a present and transferable interest therein while he possesses, in fact only a spes successionis is within protection of s. 43 of Transfer of Property Act - If it is then on facts found by courts below title of respondents under must prevail over that of appellant under - If it is not then appellant succeeds on basis of - Section 43 of Transfer of Property Act runs as follows Where a person fraudulently or erroneously represents that he is authorised to transfer certain immovable property and professes to transfer such property for consideration such transfer shall at option of transferee operate on any interest which transferor may acquire in such property at any time during which contact of transfer subsists - Nothing in this section shall impair right of transferees in good faith for consideration without notice of existence of said option - Court accordingly hold that when a person transfers property representing that he has a present interest therein whereas he has in fact only a spes successionis transferee is entitled to benefit of s 43 if he has taken transfer on faith of that representation and for consideration - In present case Santhappa vendor in represented that he was entitled to property in praesenti and it has been found that purchaser entered into transaction acting on that representation - He therefore acquired title to properties under s. 44 of Transfer of Property Act when Santhappa became in titulo on death of Gangamma on February and subsequent dealing with them by Santhappa by way of release under did not operate to vest any title in appellant - Rule is that if a man who has no title whatever to property grants it by a conveyance which in form carries legal estate and he subsequently acquires an interest sufficient to satisfy grant estate instantly passes - Equity treates that as done which ought to be done - Doctrine may not apply if deed of transfer itself was invalid or if third party has acquired title bona fide for consideration and without notice. In present case execution and registration of deed of gift is not disputed - Nor is there any illegality or invalidity attaching with deed - Rule of estoppel by deed would clearly apply - answer is no - That being so third parties i.e respondents herein who have no title muchless a pre-existing title in suit property cannot question title of donors vesting in donce - Defect if any in decree which was nothing except of not being engrossed on requisite stamp papers was cured - Contents of decree came to be engrossed on requisite stamp papers - Decree would in facts and circumstances of case relate back to - Petition Dismissed