Saverimuttu, S. V. Thangavelautham, P.

[IN THE PRIVY COUNCIL]

1954 Present: Earl Jowitt, Lord Keith of Avonham and
Mr. L. M. D. de Silva

S. SAVERIMUTTU, Appellant, and P. THANGAVELAUTHAM et al.,
Respondents

Privy Council Appeal No. 14 of 1953

S. C. 174-D. C. Point Pedro, 2,761

Trust-Sale of land by debtor to creditor-Adequate consideration-Parol evidence of agreement by transferee to reconvey the land-Admissibility-Prevention of Frauds Ordinance (Cap. 57), s. 2-Trusts Ordinance (Cap. 72), s. 5 (1) and (3).

Although in some cases the provisions of section 2 of the Prevention of Frauds Ordinance have been relaxed on proof of fraud on the ground that the " Statute of Frauds may not be made an instrument of fraud ", this proposition has only a limited application, and it is necessary that Courts should approach with caution the facts and the law on which any case is claimed to be an exception to the general rule that a transaction relating to immovable property is invalid unless the terms of the transaction have been embodied in a notarially attested document.

A. transferred for adequate consideration certain immovable property to B. by Deed No. 3. The property in question had previously been the subject matter of a mortgage decree on which, at the date of the transfer, a balance amount of Rs. 2,000 was payable by A. to B. It was stated in Deed No. 3 that the consideration for the transfer was the balance amount due on the mortgage decree. Satisfaction of the decree was duly certified of record, and, on the face of it Deed No. 3 was an unqualified transfer for consideration. Immediately after the execution of Deed No. 3, on the same day, B. by Deed No. 4 leased the property to A. for a period of six years.

In a rei vindicatio action instituted (after the expiry of the lease) against A. by B .'s successor in title, A. sought to assert by evidence of an informal agreement that the transfer to B. was subject to a condition that B. was to hold the land in trust for A. and reconvey it to A. on payment to B. of a sum of Rs. 2,000 with interest.

Held, that the informal agreement relied on by A. amounted not to a trust but to a contract for the transfer of immovable property and was therefore invalid as it contravened the provisions of section 2 of the Prevention of Frauds Ordinance.

Valliamma Atchi v. Abdul Majeed (1947) 48 N. L. R. 289, distinguished.

APPEAL from a judgment of the Supreme Court reported in 54 N. L. R. 28.

Stephen Chapman, for the 1st defendant appellant.

H. J. Phillimore, Q. C, with Robert N. Hales, for the plaintiff respondent.

Cur. adv. vult.

July 13, 1954. [Delivered by MR. L. M. D. DE SILVA]-

This is an appeal from a judgment of the Supreme Court of Ceylon dated 26th July, 1951, which, setting aside a judgment of the District Court of Jaffna, entered a decree in favour of the first respondent (hereinafter called " the respondent ") to this appeal.

The respondent instituted the action in the District Court of Jaffna to obtain a declaration that he was entitled to a land called Pannaikaddaiyady situated at Valvettiturai, an order for possession and damages. The appellant was the first defendant in the action. The 2nd to the 10th respondents were the 2nd to the 10th defendants.

The respondent in his plaint averred that the appellant and his late wife Annammah had at one time owned the land called Pannaikaddaiyady, that they had by Deed No. 3 of the 12th November, 1937, transferred the said land to one Karthigesar Aiyadurai who by Deed No. 308 of the 24th June, 1946, had transferred it to the respondent. He thus claimed to be the owner of the land and entitled to possession. He averred that the appellant and the 2nd to the 10th respondents were in wrongful possession of the land.

The 2nd to 10th respondents did not appear at the hearing of this appeal but it is common ground, and their Lordships are satisfied, that their position with regard to the land

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