HIGH COURT OF KERALA
C.S. Sudha, J
SARVADAMANAN – Appellant
Versus
VARGHESE – Respondent
RFA 344/2003
Collusive Agreement - Property Sale - The court dismissed the appeal as the defendant, a stranger to the transaction, could not challenge the validity of the sale agreement. The court also found no evidence to hold the agreement as collusive.
Fact of the Case:
The plaintiff entered into an agreement to purchase a property from the first defendant. The first defendant subsequently executed release and sale deeds with other defendants, leading to a dispute over the property.
Finding of the Court:
The trial court declined the prayer for specific performance but granted the return of the advance amount to the plaintiff. The fifth defendant's appeal was dismissed by the court.
Issues: Validity of the sale agreement, challenge by a stranger to the transaction, and the nature of the transaction were the key issues.
Ratio Decidendi: The court held that a stranger to a transaction cannot challenge the validity of the sale agreement. It also found no evidence to support the claim that the agreement was collusive.
Final Decision: The appeal was dismissed as the court found no reason to interfere with the findings of the trial court.
J U D G M E N T
This appeal has been filed by defendant no.5 against the judgment and decree dated 28/02/2003 in O.S.No.359/1998 on the file of the Subordinate Judges' Court, Irinjalakuda. The respondents herein are the plaintiff and defendants 1 to 4 respectively in the suit. The parties and the documents will be referred to as described in the suit.
2. The plaint schedule property having an extent of 1 acre and
64.780 cents was obtained by Devassy, the predecessor-in-interest of defendants 1 to 3 as 'C' schedule of partition deed no.856/1959. After the death of Devassy, the property devolved on defendants 1 to 3 and they were in joint possession of the same. Out of this property, the 1/3rd share of the first defendant having an extent of 54.667 cents of property was agreed to be sold to the plaintiff as per Ext.A1 agreement dated 28/04/1998. The property was agreed to be sold at the rate of ₹800/- per cent. On the date of the agreement, an amount of ₹3 lakhs was paid as advance sale consideration. The time stipulated for execution of the deed was nine months from 28/04/1998. The plaintiff was always ready and willing to perform his part of the contract within the stipulated time. However, the defendant was never ready or willing to perform his part of the agreement and he never took any steps to partition of the property or convince the plaintiff of its extent or the fact that it was free from any encumbrances. Thereafter on enquiry the plaintiff came to know that subsequent to the execution of Ext.A1 agreement, the first defendant as well as the second defendant, who are siblings, executed Ext.A2 release deed dated 26/05/1998 in favour of the third defendant, that is, their mother with regard to their respective shares in the property. On 24/09/1998 the third defendant as per Ext.A3 sale deed sold the entire extent of property to the fourth defendant for an amount of ₹55,000/-, though the property was much more valuable. The fourth defendant as per Ext.A4 sale deed dated 23/10/1998 sold the property in favour of the fifth defendant for a sale consideration of ₹57,000/-. Exts.A2 to A4 documents have been created by defendants 1 to 3 in collusion with defendants 4 and 5 only to defeat the valuable rights obtained by the plaintiff as per Ext.A1. Exts.A3 and A4 documents have never come into force. The said documents are not binding on the plaintiff and hence are liable to be set aside. The plaintiff is also entitled to a decree for specific performance or in the alternative for return of the advance amount of ₹3,00,000/- and also an amount of ₹1,00,000/- towards loss with interest at the rate of 18% per annum from the defendants and their assets.
3. Before the trial court, defendants 1 to 3 though served with summons, remained ex-parte.
4. The fourth defendant filed written statement contending that he is a bona fide purchaser of the property from the third defendant as per Ext.A3 sale deed. After he obtained title over the property by way of Ext.A3, he conveyed the property in favour of the fifth defendant by way of Ext.A4 sale deed for valuable sale consideration. Now defendants 1 to 3 have no manner of right in the property. Ext.A1 agreement relied on by the plaintiff is a concocted one made in collusion with the first defendant to defeat the rights of the fourth as well as the fifth defendant. The said agreement is not supported by any consideration. The plaintiff never had the financial capacity to purchase the property. Since Ext.A1 is a fraudulent and concocted one, the plaintiff is not entitled to the reliefs prayed for in the plaint.
5. The fifth defendant filed separate written statement claiming to be a bona fide purchaser of the property. The court fee paid by the plaintiff is insufficient. The property would fetch morethan ₹40 lakhs. So the plaintiff needs to pay the necessary court fee for the relief seeking setting aside the documents. The agreement relied on by the plaintiff is a concocted one. The signature seen
Login now and unlock free premium legal research
Login to SupremeToday AI and access free legal analysis, AI highlights, and smart tools.
Login
now!
India’s Legal research and Law Firm App, Download now!
Copyright © 2023 Vikas Info Solution Pvt Ltd. All Rights Reserved.