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Telangana High Court
R. Yadagiri, Died Per Lrs Appellants 2 To … vs Smt. Subhadra Bai And 5 Ors, Hyderabad. on 2 May, 2025
Author: G.Radha Rani
Bench: G.Radha Rani
THE HONOURABLE Dr.JUSTICE G.RADHA RANI
CITY CIVIL COURT APPEAL Nos.119 and 155 of 2006
COMMON JUDGMENT:
CCCA No.119 of 2006 is filed by the appellant-defendant No.1 and
CCCA No.155 of 2006 is filed by the appellant-defendant No.2 aggrieved
by the judgment and decree dated 25.04.2006 passed by the IV Senior
Civil Judge, City Civil Court, Hyderabad in O.S. No.28 of 1997.
2. The respondent Nos.2 to 5 were the wife and children of the
original plaintiff Sri Narsing Rao Chavan. The original plaintiff (plaintiff
No.1) died and as per the orders in I.A. No.1741 of 2002 the respondent
Nos.2 to 5 were brought on record on 06.01.2003. Initially, the suit was
filed by the original plaintiff against defendant No.1 alone. Subsequently,
defendant No.2 was also impleaded in the suit as per the orders in I.A.
No.283 of 2002 dated 02.12.2003.
3. The suit was filed for cancellation of sale deed dated
26.05.1995 registered as document No.2358 of 1995 in respect of a
portion of a house bearing No.4-6-260 to 264 admeasuring 92.5 sq. yds.,
situated at Esamiabazar, Hyderabad. The plaintiff contended that
originally the house property bearing No.4-6-259, 261 to 264 (old) and
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presently bearing Municipal No.4-6-260 to 264 admeasuring 185 square
yards situated at Esamiabazar, Hyderabad, was owned and possessed by
late D. Jagannath Rao, who purchased the same under document No.931
of 1987 and he died intestate leaving behind him, his wife Smt. D.
Godavari Bai. Smt. D. Godavari Bai also died on 07.03.1994. They had
no issues. During her lifetime, Smt. Godavari Bai executed a Will
bequeathing the aforesaid properties in favour of the plaintiff No.1, who
was her natural brother. One Smt. G. Prameela Bai, wife of G. Mohan
Rao (the sister’s daughter of Smt. Godavari Bai) also claimed right of
ownership in and over the property claiming that she was the adopted
daughter of Smt. Godavari Bai and filed a suit for injunction bearing O.S.
No.1831 of 1994 on the file of III Assistant Judge, City Civil Court,
Hyderabad. The matter was settled between the plaintiff No.1 and G.
Prameela Bai out of court inter alia agreeing to share the property equally
and the said suit was withdrawn. Smt. G. Prameela Bai and the plaintiff
jointly sold a portion of the aforesaid property admeasuring 92.5 sq.yds.,
in favour of the son of defendant No.1. As per the settlement, the entire
sale consideration was paid to Smt. G.Prameela Bai. As per the
settlement, the remaining half property i.e. H.No.4-6-260 to 264
admeasuring 92.5 sq.yds., (the suit schedule property) was conveyed to
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defendant No.1 under registered sale deed document No.2358 of 1995.
The sale transaction agreed in respect of the suit schedule property was
Rs.2,00,000/- (Rupees Two lakhs only). The defendant paid Rs.50,000/-
i.e. Rs.25,000/- on 24.04.1995 on the date of the agreement and
Rs.25,000/- on 28.05.1995 to the plaintiff as he was alone entitled to
receive the entire sale consideration amount pertaining to the plaint
schedule property. But, for the best reasons known to defendant No.1, the
sale consideration amount was shown in the sale deed as Rs.1,90,000/-.
The defendant issued two post-dated cheques on 26.05.1995 on the date of
registration of Sale Deed, one cheque bearing No.651851 dated
25.06.1995 for Rs.25,000/- and the second cheque bearing No.651853
dated 25.08.1995 for Rs.1,25,000/-, both drawn on Andhra Bank,
Hyderabad in favour of the plaintiff. The plaintiff in good faith accepted
the said two post-dated cheques. As per the terms of the sale deed, in case
the cheques or any one of the two cheques were not honoured for want of
any reason, the sale transaction would become null and void in respect of
the Schedule property and the plaintiff had got every right to cancel the
sale deed and in such event, the defendant would have no right to take any
kind of excuse or objection. The defendant No.1 was fully aware of the
said terms embodied in the sale deed.
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3.1. The plaintiff further averred that Sri V.Rajagopal was his
counsel in O.S. No.1831 of 1994 and also in R.C.Nos.492 of 1994, 442 of
1994 filed by the tenants under Section 9 of the Rent Control Act for
deposit of rent before the court of the II Additional Rent Controller,
Hyderabad. Sri Rajagopal, Advocate, mediated the said transaction and a
sum of Rs.50,000/-was given by the defendant to the plaintiff on two
different dates as stated earlier on 24.04.1995 and 28.05.1995. An
account was also opened in Syndicate Bank, Kachiguda, Hyderabad
bearing No.13479 in the name of the plaintiff No.1 with the introduction
of Sri V. Rajagopal. The Advocate Sri V.Rajagopal identified the plaintiff
No.1 at the time of opening of the said account. An amount of Rs.500/-
was deposited in the account and Rs.4,500/- was given to the plaintiff
No.1. The remaining amount of Rs.45,000/- was kept with Sri
V.Rajagopal. The two cheques given by the defendant No.1 to the
plaintiff were also kept with Sri V.Rajagopal being the mediator. When
the cheques were to be presented on due dates, the plaintiff approached Sri
Rajagopal, Advocate, who informed that there was still time of six
months. The plaintiff in good faith kept quiet. Subsequently, the plaintiff
and Rajagopal went to the bank for encashment of cheques and found that
there was no amount to the credit of the defendant No.1 in his bank
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account. The plaintiff No.1 suspected the attitude of the defendant No.1
and Sri Rajagopal and demanded the amount of Rs.45,000/- forthwith and
also to return the two post-dated cheques which were in the custody of Sri
V.Rajagopal. On refusal to pay the said amount of Rs. 45,000/- and to
return the cheques, the plaintiff No.1 filed a written complaint before the
Bar Council of State of Andhra Pradesh against Advocate Sri V.
Rajagopal bearing complaint No.63 of 1996 which was pending enquiry.
The plaintiff No.1 also got issued notice dated 14.03.1996 to the
defendant No.1 showing his intention to cancel the sale deed as the
balance amount was not paid. The defendant No.1 in collusion with Sri
V. Rajagopal, Advocate, took back the cheques from him. Sri V.
Rajagopal, Advocate had no authority to deliver the cheques to the
defendant No.1 as he was only a mediator and custodian of the cheques.
The defendant No.1 sent a reply dated 04.04.1996 stating that in lieu of
the post-dated cheques for Rs.25,000/- and for Rs.1,25,000/-, she had paid
the amount of Rs.1,50,000/- in cash to the plaintiff No.1. The said
averments of the defendant No.1 were false, mischievous and without any
basis. The plaintiff No.1 had not received the amount. In fact, a small
amount was paid on different dates to the plaintiff No.1 as stated in the
notice dated 14.03.1996. In all, a sum of Rs.70,000/- was paid by the
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defendant out of which Rs.45,000/- was with Sri V. Rajagopal, Advocate
against whom a complaint was already lodged before the Bar Council of
Andhra Pradesh. The defendant No.1 had falsely taken a stand that she
has paid the amount to the plaintiff No.1. As per the terms of the sale
deed dated 26.05.1995, the plaintiff had every right to cancel the sale deed
as the defendant No.1 failed to pay the balance of sale consideration
amount. As the sale deed was executed without consideration and as the
defendant No.1 had not paid the amount, the sale transaction had become
null and void and the plaintiff No.1 was entitled to cancel the sale deed.
3.2. The plaintiff further averred that he had delivered the vacant
and actual possession of the plaint Schedule property to the defendant
No.1 and sought for re-delivery of the possession of the plaint schedule
property in his favour and claimed damages of Rs.3,000/- per month from
the date of the suit and also sought for mandatory injunction restraining
the defendant No.1 from alienating the plaint schedule property in favour
of any third person.
4. The defendant No.1 filed written statement contending that
the plaintiff No.1 approached the Court with unclean hands suppressing
the material facts. The plaintiff No.1 along with Smt. G. Prameela Bai
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sold the property in question to him under a registered sale deed dated
26.05.1995 for a lawful and valid consideration and the plaintiff No.1 put
the defendant in possession of the property sold under the sale deed and
since the date of sale, the defendant was in peaceful possession and
enjoyment of the said property. She further submitted that the cheques
mentioned in the plaint for Rs.25,000/- and Rs.1,25,000/- were issued by
the defendant No.1 to the plaintiff No.1 and the said cheques were
returned to the defendant No.1 after collecting the cash from her in lieu of
the said cheques on 26.06.1995 and 29.08.1995 and in token of receipt of
the amount in lieu of the cheques, the plaintiff No.1 executed the receipts
dated 22.06.1995 and 24.08.1995. Thus, the entire agreed sale
consideration was received by the plaintiff No.1 and suppressing the
material facts, the plaintiff No.1 got issued a legal notice dated 14.03.1996
through his Advocate to which the defendant got issued a reply notice
dated 04.04.1996 mentioning the true facts that he paid the amount in cash
in lieu of the cheques. Since the plaintiff received the entire sale
consideration, he was not entitled either for cancellation of the sale deed
or for damages as claimed in the suit.
4.1. She further submitted that subsequent to the purchase of the
property, the defendant had sold the said property to Sri R. Yadagiri
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(defendant No.2) and put him in possession of the property and that the
said purchaser was in possession and enjoyment of the suit schedule
property. She further contended that the allegations made against Sri V.
Rajagopal, Advocate by the plaintiff No.1 were false and incorrect. In
view of the payment of entire sale consideration, the plaintiff No.1 was
not entitled for the relief of cancellation of the sale deed executed by him
and prayed to dismiss the suit. She further contended that as the sale deed
was executed by the plaintiff No.1 along with Smt. G. Prameela Bai, Smt.
Prameela Bai was also a proper and necessary party to the suit and the suit
was bad for non-joinder of proper and necessary party and liable to be
dismissed on the said ground also.
5. Subsequent to the written statement filed by the defendant
No.1, defendant No.2 was impleaded as per the orders in I.A. No.283 of
2002 dated 02.12.2003. The defendant No.2 filed written statement
contending that he was a bonafide purchaser, who purchased the suit
schedule property from the defendant No.1 by paying the total sale
consideration as agreed under the agreement of sale dated 19.12.1996.
Possession was delivered to him by defendant No.1. Ever since the date
of delivery of possession, he was enjoying the suit schedule property,
without any hindrance or interference from anybody as absolute owner of
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the property. After purchase of the suit schedule property, he had
developed the same by investing huge amounts and was paying property
tax and enjoying other facilities like water, electricity etc. He also
contended that the suit was liable to be dismissed for non-joinder of
proper and necessary party Smt. G. Prameela Bai, who also executed sale
deed along with the plaintiff No.1 in favour of defendant No.1.
6. Basing on the said pleadings, the trial court framed the issues
as follows:
1. Whether the plaintiff is entitled for a decree for
cancellation of sale deed, dated 26.05.1995 in favour
of defendant as prayed for?
2. Whether the plaintiff is entitled for redelivery of
possession of the plaint schedule property?
3. Whether the plaintiff is entitled for damages at
Rs.3000/- p.m., from the date of the suit for the
unauthorized occupation of the defendant as prayed
for?
4. Whether the plaintiff is entitled for mandatory
injunction as prayed for against the defendant?
5. To what relief?
An additional issue was framed on 14.06.2004 as follows:
Whether the defendant No.2 is a bonafide purchaser for valid
consideration?
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CCCA Nos.119&155 of 2006
7. The plaintiff No.2, the wife of the original plaintiff was
examined as PW.1 and Exs.A1 to A5 were marked on behalf of the
plaintiffs. The General Power of Attorney holder and son of defendant
No.1 was examined as DW.1. A witness, who alleged to have paid a sum
of Rs.75,000/- to defendant No.1 in turn to pay to the plaintiff No.1,
against the cheque for Rs.1,25,000/- and who was alleged to be present at
the time of payment, was examined as DW.2. The defendant No.2 was
examined as DW.3. The husband of defendant No.1 was examined as
DW.4. Exs.B1 to B56 were marked on behalf of the defendants.
8. The learned IV Senior Civil Judge, City Civil Court,
Hyderabad, on considering the evidence of both the parties and on hearing
the arguments adduced by the counsel representing both the parties,
decreed the suit in part, cancelling the sale deed bearing document
No.2358 of 1995 dated 26.05.1995 executed by the plaintiff No.1 in
favour of defendant No.1 and directed the defendants to redeliver the
vacant possession of the suit schedule property within sixty (60) days
from the date of judgment. The relief of the claim for damages @
Rs.3,000/- per month was dismissed. The relief of mandatory injunction
restraining the defendants from alienating or creating any encumbrances
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CCCA Nos.119&155 of 2006
over suit schedule property was granted. The additional issue was
answered holding that the defendant No.2 was not a bonafide purchaser.
9. Aggrieved by the said judgment and decree dated 25.04.2006
in O.S. No.28 of 1997 passed by the learned IV Senior Civil Judge, City
Civil Court, Hyderabad, both defendant Nos.1 and 2 preferred these
appeals.
10. Heard Sri Kasireddy Jagathpal Reddy, learned counsel for the
appellant (defendant No.1) in CCCA No.119 of 2006, Sri Goverdhan
Venu, learned counsel representing Nomos Vistas, record for the appellant
(defendant No.2) in CCCA No.155 of 2006 and Sri T.V. Rajeevan,
learned counsel for the respondent Nos.1 to 5-plaintiff Nos.2 to 6.
11. Learned counsel for the appellant in CCCA No.119 of 2006
(defendant No.1) contended that the trial court failed to verify whether the
cheques were deposited in the bank for realization of the amount as stated
by the plaintiff No.1. It was the duty of the plaintiff No.1 to deposit the
cheques before the Bank for realization of the amount, but he did not
deposit the same and on the other hand stated that he deposited the
cheques and the same were dishonoured. As per the terms of the sale
deed, as the plaintiff had not deposited the cheques, he could not seek for
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CCCA Nos.119&155 of 2006
cancellation of the sale deed. The trial court erred in giving a finding that
the defendant No.1 had not paid the balance sale consideration of
Rs.1,50,000/- against the two cheques, as she had not filed the receipts
before the trial court, but the trial court failed to discuss as to how the
cheques had come to the custody of defendant No.1 and failed to observe
that without receipt of the balance sale consideration, the vendor would
not return the cheques to the purchaser. The court below failed to
consider the evidence of DW.4, the husband of the defendant No.1
wherein he stated that the plaintiff Mr. Narsing Rao Chavan personally
approached him and requested him to pay the amount in cash and
accordingly, defendant No.1 paid the amount in cash and received the
cheques. The cheques itself were the acknowledgment to defendant No.1.
Without receipt of payment, nobody would return the cheques as such, the
court below ought to have accepted the contention of the defendants.
11.1. He further contended that the plaintiff No.1 had received the
sale consideration in the presence of Mr. Rajagopal. All the witnesses
went to the house of plaintiff No.1 and paid the same. To that effect, the
defendants’ witnesses deposed, but the court below failed to consider the
same. The receipts were filed before the Bar Council of A.P., as such, the
same could not be filed before the court. The Bar Council of A.P. also
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CCCA Nos.119&155 of 2006
observed that the defendant No.1 paid the amounts to the counsel
Mr. Rajagopal and that Mr. Rajagopal did not pay the amount to plaintiff
No.1. If the counsel received the amounts from the defendant No.1 and if
he did not repay to the plaintiff, the plaintiff No.1 ought to have filed the
suit against Mr. Rajagopal, Advocate, but not against the defendants. The
plaintiff No.1 failed to explain as to why they had given cheques to their
counsel. The court below ought to have seen that the Bar Council of India
had set aside the order passed by the Bar Council of A.P. The said order
was marked as Ex.B56. The Disciplinary Committee observed that all the
receipts were genuine. As the matter was pending before the Bar Council
of India, the defendant No.1 did not obtain the original receipts and could
not file the same before the court. The court below discarded the evidence
of DW.2 on the ground that he did not speak about payment of
Rs.25,000/-. As DW.2 was present while making payment of
Rs.1,25,000/-, DW.2 would speak only to that extent. The court below
erred in observing that DW.4 had introduced a new story about sharing of
sale consideration between the plaintiff No.1 and Smt. G. Prameela Bai at
the rate of Rs.2,00,000/- and Rs.3,00,000/-, respectively. It was not a new
version. It was a fact that there were two house properties, one house
property was purchased by DW.1 for a sale consideration of Rs.3,00,000/-
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CCCA Nos.119&155 of 2006
and the plaint schedule property was purchased for a sale consideration of
Rs.2,00,000/-. DW.4, the husband of defendant No.1, was the right
person to depose in respect of the transaction, because the entire
transaction took place through him only.
11.2. He further contended that the court below failed to consider
the evidence of PW.1 wherein she admitted in the cross-examination that
as per the understanding of payment of amount by way of cash, the post
dated cheques should be returned to defendant No.1. Since the cheques
were returned to defendant No.1, it had to be presumed that the balance
sale consideration was received by the plaintiff No.1. The court below
passed the decree only on the basis of non-filing of the receipts. The
receipts were not at all criteria to decide the matter. The other
circumstances would need to be taken into consideration. There was a
dispute between the plaintiff No.1 and his counsel. The counsel had
received the sale consideration from defendant No.1 and returned the
cheques, but the sale consideration was not paid by the counsel to the
plaintiff No.1. As such, it could not be said that defendant No.1 did not
pay the balance sale consideration to the plaintiff No.1. As per the
Transfer of Property Act, once the property was transferred by way of
registered sale deed, it should not be cancelled. If the purchaser was due
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CCCA Nos.119&155 of 2006
any balance sale consideration, the purchaser has to file a suit for recovery
of the amount as per the judgment of the Hon’ble Apex Court in
Vidhyadhar v. Manikrao & Anr.1 and as per the judgment of the High
Court of Madras in CDJ MHC 852/2005.
12. Learned counsel for the appellant in CCCA No.155 of 2006
(defendant No.2) also contended that there was no cause of action for the
plaintiffs to seek for the relief of cancellation of the sale deed, as the
cheques alleged to have been given towards part sale consideration
amount were not dishonoured. The moment the sale deed was executed
and registered, there was transfer of ownership with all rights and interest
in the property. For the alleged non-payment of the part promised money,
the sale deed could not be cancelled. The only relief that could be claimed
by the plaintiff was for recovery of money. The sale would be complete
as soon as the sale deed was executed and possession was handed over.
The sale deed itself would disclose that possession was handed over to the
defendant No.1. There was no such concept like conditional sale under
Transfer of Property Act or under any other law. The word ‘conditional
sale’ was used only in two contexts (1) mortgage by conditional sale and
(2) mortgage by re-conveyance and relied upon the judgments of the
1
AIR 1999 SC 1441
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CCCA Nos.119&155 of 2006
Hon’ble Apex Court in Vidhyadhar v. Manikrao & Anr., wherein it was
held that the definition of sale would include the transfer of ownership
even if the consideration was not paid in full; and of Vimal Chand
Ghevarchand Jain & Others v. Ramakianth Eknath Jajoo 2 and Pandit
Chunchun Jha v. Sheikh Ebadat Ali and another3 wherein the
principles for determining whether the given transaction was a mortgage
by conditional sale or sale outright with a condition for repurchase, were
reiterated. He further relied upon the judgment of the Hon’ble Apex
Court in Yogendra Prasad Singh (Dead) through LRs. v. Ram Bachan
Devi & Others4 wherein it was held that the recitals of the sale deed were
crucial to consider whether there was transfer of title and possession.
12.1. He further contended that the trial court failed to see that
when the document was executed by two persons, one person alone could
not seek for cancellation. The other executant of the sale deed was a
proper and necessary party and the suit was bad for non-joinder of
necessary party. It was for the court to frame an issue in the said regard
and to answer the same at the time of judgment. The trial court failed to
see that the cheques given towards part sale consideration amount were
2
CDJ 2009 SC 593
3
AIR 1954 SC 345
4
CDJ 2023 SC 687
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CCCA Nos.119&155 of 2006
produced by the defendant No.1 which would clearly show that the
cheques were returned by the plaintiff to the defendant No.1 after
receiving the amount in cash. The trial court failed to see that the
payment of part sale consideration amount promised to be paid under the
sale deed was proved to have been paid through the evidence of DWs.1
to 4.
12.2. The learned counsel for the appellant-defendant No.2 further
contended that the trial court failed to see that the plaintiff relied upon
Ex.A5 order passed by the disciplinary Committee of the Bar Council of
A.P. to show that the receipts stated to have been issued acknowledging
the receipt of balance sale consideration had been forged. But, the trial
court failed to take into consideration the order passed by the Bar Council
of A.P. (Ex.A5) as well as the order under Ex.B56 passed by Bar Council
of India, wherein the order under Ex.A5 was set aside. The trial court
failed to see that when the cheques were in the custody of the defendant
and acknowledgments for receipt of amounts covered by cheques were
filed under Ex.A5 and B56, it was proved that the part consideration
promised to be paid was paid. The trial court erred in holding that the
defendant No.2 was not a bonafide purchaser and failed to look into the
fact that he made improvements to the property. The trial court failed to
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CCCA Nos.119&155 of 2006
consider that there was no relevant entry in B Register prohibiting transfer
of property by Sub-Registrar and there was no impediment for transfer of
the property. The sale was not void ab initio, it was only voidable. But no
action was taken by the plaintiffs from 1995 till 2002, the date of
execution of the sale deed by defendant No.1 in favour of defendant No.2.
No criminal complaint was filed against the Advocate Sri V. Rajagopal
and no money recovery suit was filed against defendant No.1. The burden
shifted on the plaintiff as soon as the cheques were produced. No grounds
were made out for cancellation of sale deed and contended that the
judgment of the trial court was erroneous and prayed to allow the appeal.
13. The learned counsel for the respondent Nos.1 to 5-plaintiff
Nos.2 to 6, on the other hand, contended that at the stage of issuing
notices in the suit itself, the property was sold by defendant No1 to
defendant No.2. As such, the doctrine of lis pendens would attract. There
was no averment with regard to dishonour of cheques in the pleadings, as
such, no issue was framed. Without pleadings, the counsel for the
appellants was submitting arguments in the said regard. There was a
covenant in the sale deed that the sale proceedings would be completed
only subject to the realization of the encashment of the two post-dated
cheques issued by the purchaser. A complaint case was filed by the
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CCCA Nos.119&155 of 2006
original plaintiff against his counsel before Bar Council of A.P. vide
Complaint Case No.63 of 1996. The grounds raised in the appeals were
contrary to the pleadings and prayed to dismiss the appeals.
14. Now the points for consideration in these appeals are:
1. Whether the suit is bad for non-joinder of the co-
vendor to the sale deed?
2. Whether the sale is complete by the date of
execution of sale deed (Ex.A1) and whether the
respondents-plaintiffs are entitled for
cancellation of sale deed dated 26.05.1995
executed by the original plaintiff in favour of
defendant No.1 as prayed for?
3. Whether the defendant No.2 was a bonafide
purchaser or was covered by the doctrine of lis
pendens?
4. Whether the judgment of the trial court is in
accordance with law and on facts on record?
5. To what result?
15. POINT No.1:
The contention of the learned counsel for the appellants was that as
the sale deed was executed by two persons Sri Narsing Rao Chavan and
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CCCA Nos.119&155 of 2006Smt. G. Prameela Bai, the plaintiff (Narsing Rao Chavan) alone could not
seek for cancellation of the same and Smt. Prameela Bai was also a
necessary party and the suit was bad for non-joinder of necessary party.
The defendant Nos.1 and 2 in their written statements had raised the said
aspect. But, no issue was framed in the said regard.
15.1. But, the trial court considered the said aspect and observed
that:
“It is true that Smt. G. Prameela Bai also executed the sale deed
along with the plaintiff No.1 in favour of the defendant in respect of the
plaint schedule property. But, as already observed, she is added as one
of the executants of the sale deed on account of compromise in O.S.
No.1831 of 1994 as a joint owner and since she has already sold her
property of 92.5 sq. yds., in favour of defendant No.1’s son and
received entire sale consideration and she is only a proforma party in
the sale deed and she is not entitled for any sale consideration,
therefore, she is not a necessary party to the suit.”
15.2. Both the defendant Nos.1 and 2 also admitted about the
compromise between Smt. G. Prameela Bai and Sri Narsing Rao Chavan
and both of them together executing sale deeds in favour of defendant
No.1 and her son to the extent of their shares, as per the compromise.
DW.1 and DW.4 also stated in their evidence with regard to the said
compromise and executing sale deeds accordingly and Prameela Bai
receiving her share of Rs.3,00,000/- to the extent of her half share and the
consideration of Rs.2,00,000/- to be paid to the plaintiff Sri Narasing Rao
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CCCA Nos.119&155 of 2006
Chavan alone pertaining to his half share. Thus, the defendants also
admitted that though she was a co-vendor, she was only a proforma party,
as she received the entire sale consideration pertaining to her half share.
15.3. As the co-vendor Smt. G. Prameela Bai had already aligned
her interest in the property and received her share of consideration, she is
only a proforma party and the rights and issues between the parties can be
adjudicated even without her presence. As no relief is claimed against
her, the suit is not bad for non-joinder of the co-vendor. As such, point
No.1 is answered holding that the suit is not bad for non-joinder of Smt.
Prameela bai.
16. POINT No.2:
In a contract of sale, payment of consideration was essential. If the
consideration is not paid, the transfer can be challenged. A sale deed that
recites payment but in reality no payment was made can be invalidated if
proved. Mere execution and registration would not always complete a
sale. If full consideration is not paid and there was failure of contractual
obligation, cancellation can be sought. The courts can cancel a deed even
after registration if the reality shows non-payment. If payment of
consideration was sine qua non for execution, non-payment renders the
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CCCA Nos.119&155 of 2006document voidable. If sale was conditional upon payment and there was
no actual payment then a buyer cannot claim title unless he proves
payment.
17. Section 31 of the Specific Relief Act 1963 specifies when
cancellation of a written instrument can be ordered. It reads as follows:
“31. When cancellation may be ordered.–
(1) Any person against whom a written instrument is
void or voidable, and who has reasonable apprehension
that such instrument, if left outstanding may cause him
serious injury, may sue to have it adjudged void or
voidable; and the court may, in its discretion, so adjudge
it and order it to be delivered up and cancelled.
(2) If the instrument has been registered under the Indian
Registration Act, 1908 (16 of 1908), the court shall also
send a copy of its decree to the officer in whose office
the instrument has been so registered; and such officer
shall note on the copy of the instrument contained in his
books the fact of its cancellation.”
18. Section 54 of the Transfer of Property Act, 1882 defines
‘sale’ as follows:
“54. “Sale” is a transfer of ownership in exchange for a
price paid or promised or part- paid and part-promised.Such a transfer, in the case of tangible immoveable
property of the value of one hundred rupees and
upwards, or in the case of a reversion or other intangible
thing, can be made only by a registered instrument.In the case of tangible immoveable property, of a value
of less than one hundred rupees, such transfer may be
made either by a registered instrument or by delivery of
the property.
23
Dr.GRR,J
CCCA Nos.119&155 of 2006Delivery of tangible immoveable property takes place
when the seller places the buyer, or such person as he
directs; in possession of the property.
A contract for the sale of immoveable property is a
contract that a sale of such property shall take place on
terms settled between the parties.
It does not, of itself, create any interest in or charge on
such property.”
19. The definition of sale under Section 54 of the Transfer of
Property Act includes transfer of ownership in exchange for a price paid
or promised or part paid and part promised. As such, the non-payment of
the full consideration cannot be a ground for cancellation of sale deed.
But, if the sale deed includes a condition that payment of full
consideration is an important part of the contract, (either immediate
payment or within a timeframe) the plaintiff can seek for cancelation of
the sale deed. As such, payment of consideration was vital for a valid sale
and mere registration is not enough if payment was absent. Sale deed can
be cancelled if there was non-payment and serious prejudice was caused
to the vendor. The Hon’ble Apex Court in Vidhyadhar v. Manik Rao
and Ant. (1 supra) held that:
“36. The definition indicates that in order to constitute a sale,
there must be a transfer of ownership from one person to
another, i.e., transfer of all rights and interests in the properties
which are possessed by that person are transferred by him to
another person. The transferor cannot retain any part of his
interest or right in that property or else it would not be a sale.
The definition further says that the transfer of ownership has to
24
Dr.GRR,J
CCCA Nos.119&155 of 2006be for a “price paid or promised or part-paid and part-
promised”. Price thus constitutes an essential ingredient of the
transaction of sale. The words “price paid or promised or part-
paid and part-promised” indicate that actual payment of whole
of the price at the time of the execution of sale deed is not sine
qua non to the completion of the sale. Even if the whole of the
price is not paid but the document is executed and thereafter
registered, if the property is of the value of more than Rs.100/-,
the sale would be complete.
37. There is a catena of decisions of various High Courts in
which it has been held that even if the whole of the price is not
paid, the transaction of sale will take effect and the title would
pass under that transaction. To cite only a few, in Gayatri
Prasad v. Board of Revenue and Ors. (1973) Allahabad Law
Journal 412, it was held that non-payment of a portion of the
sale price would not effect validity of sale. It was observed that
part payment of consideration by vendee itself proved the
intention to pay the remaining amount of sale price. To the
same effect is the decision of the Madhya Pradesh High Court
in Sukaloo and Anr. v. Punau.
38. The real test is the intention of the parties. In order to
constitute a “sale”, the parties must intend to transfer the
ownership of the property and they must also intend that the
price would be paid either in presenti or in future. The
intention is to be gathered from the recital in the sale deed,
conduct of the parties and the evidence on record.”
20. The sale deed dated 26.05.1995 executed by the original
plaintiff in favour of the defendant No.1 vide registered document
No.2358 of 1995 was marked as Ex.A1. The recitals of the sale deed
would disclose that one G. Prameela Bai W/o. Sri G. Mohan Rao, and Sri
Narasing Rao Chavan (original plaintiff) S/o.late Sri Marthanda Rao
Chavan were the vendors and Smt. J. Sharada Bai W/o.Sri J. Harilal
(defendant No.1) was the purchaser. It was mentioned therein that late Sri
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CCCA Nos.119&155 of 2006
D. Jagannath purchased the immovable property bearing Municipal No.4-
6-259, 261 to 265 situated at Esamiabazar, Hyderabad, presently
Municipal No.4-6-260 to 264 situated at Qassab Galli, Esamiabazar,
Hyderabad, admeasuring 185 sq. yds., vide registered document No.931
of 1957 registered before the Sub-Registrar, Hyderabad and he died
intestate in the year 1966. His wife late Smt. D. Godavari Bai succeeded
to the properties purchased by her husband and she was in continuous
physical possession till her death. She died intestate on 07.03.1994 due to
illness and old age leaving behind her the vendors as her legal heirs and
successors to the said property. After the death of Smt. D. Godavari Bai,
the vendor Nos.1 and 2 were at logger heads with each other in the matter
of possession of the said property and vendor No.1 Smt. G. Prameela Bai
filed a suit in O.S. No.1831 of 2014 on the file of the III Assistant Judge,
City Civil Court, Hyderabad, but on the advice of the elders and well
wishers, had withdrawn the suit. The said suit was dismissed as not
pressed on 24.05.1985 with an understanding to share the undivided
property of 185 sq. yds., proportionately in equal shares admeasuring 92.5
sq.yds, each. The purchaser agreed to purchase one part of the said
property for a total sale consideration of Rs.1,90,000/-. The vendor No.1
G. Prameela Bai has given her consent for the above consideration to be
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CCCA Nos.119&155 of 2006
paid to vendor No.2, as she has received the entire consideration of
Rs.3,00,000/- with regard to the sale of the property of the other part of
92.5 sq. yds., and as agreed upon, the purchaser has paid in cash
Rs.40,000/- to the vendor No.2 Sri Narsing Rao Chavan and also issued
two post dated cheques for the balance amount of Rs.1,50,000/- out of the
total consideration of Rs.1,90,000/-. On receiving the two post dated
cheques, and cash of Rs.40,000/-, Sri Narsing Rao Chavan had agreed to
give his acceptance for the registration of the sale of the schedule property
to the extent of his half share from the joint property. But it was also
further recorded that the sale proceedings would be completed only
subject to the realization of the encashment of the above mentioned
two post dated cheques issued by the purchaser and accepted by the
vendor No.2 in good faith. That, in case if the above mentioned
cheques anyone or all the two cheques are dishonoured for want of
any reason best known to the purchaser, the sale proceedings would
be nullified to the extent of schedule property and the vendors herein
are empowered to cancel the sale deed in future for which the
purchaser has no excuse and objection.
21. Thus, the recitals of the sale deed would disclose that it was
a conditional sale and the sale proceedings would be completed only
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CCCA Nos.119&155 of 2006
subject to realization of the encashment of two post dated cheques and in
case, the cheques were dishonoured, the sale proceedings could be
nullified and the vendors were empowered to cancel the sale deed. The
intention of the parties also could be gathered from the recitals of the sale
deed that if the vendor No.2 had not received the entire sale consideration,
the sale is liable to be cancelled. It was a condition precedent agreed by
the parties prior to registering the sale deed itself.
22. As the original plaintiff died, the wife of the original plaintiff
was examined as PW.1. She filed her evidence affidavit on the same lines
as averred in the plaint. In the cross-examination made by the counsel for
defendant No.1, she stated that she was present when the negotiations took
place between her husband and defendant No.1. Before filing of the suit,
a notice was given to defendant No.1. They had not received any amount
from defendant No.1 for execution and registration of sale deed as on the
date of it. She stated that there was no middleman for the transaction
between defendant No.1 and her husband on one side and her husband and
Prameela Bai on the other side. There was no agreement to sell before the
sale deed. She admitted that their previous counsel was Sri V. Rajagopal
and that the entire transaction was conducted in his presence. The amount
of Rs.50,000/- received from defendant No.1 was kept with their advocate
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CCCA Nos.119&155 of 2006
Rajagopal as they had confidence on him. The sale deed was also got
prepared by Rajagopal and it was mentioned in the sale deed that apart
from Rs.50,000/- for the balance amount of Rs.1,25,000/- and for
Rs.25,000/-, two post dated cheques were given. She admitted that those
two cheques were also kept with Mr. Rajagopal and the understanding
was that on payment of the amount by way of cash by defendant No.1, the
post dated cheques would be returned to defendant No.1. She stated that
she was not aware whether Mr. Rajagopal received the amount from
defendant No.1 and returned post dated cheques and that she was not
aware whether her husband received the cheques from Rajagopal. She
also admitted that since Mr. Rajagopal did not pay the amount to them,
they filed a complaint against him before the Bar Council of A.P. She
stated that she was not aware whether any suit was filed against Mr.
Rajagopal for recovery of amount and admitted that basing on the
punishment given to Mr. Rajagopal by the Bar Council, they filed the
present suit. She admitted that they had confidence and trusted Mr.
Rajagopal in the beginning. She stated that she was not aware whether
any receipts were obtained from Mr. Rajagopal while handing over the
cheques to him and that she did not know whether her husband asked Mr.
Rajagopal demanding cheques from him. She denied that her husband
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CCCA Nos.119&155 of 2006
and Mr. Rajagopal after collecting the amounts from defendant No.1
returned the post dated cheques to her. She admitted that personally she
had no knowledge as to what transpired between her husband and Mr.
Rajagopal.
23. Thus, the oral evidence of PW.1 is not of much use to gather
as to what actually transpired between the original plaintiff, their counsel
Rajagopal and defendant No.1. But, the documents marked under Ex.A5,
the Disciplinary Committee Proceedings of the Bar Council of A.P. and
Ex.B.56, the proceedings of the Bar Council of India would give a
glimpse of it.
24. The certified copy of the order dated 31.01.1998 passed by
the Disciplinary Committee of the Bar Council of A.P. in Complaint Case
No.63 of 1996 was marked as Ex.A5. The original plaintiff in the present
case was the complainant in the said complaint case and Sri V. Rajagopal,
Advocate was the respondent in the above complaint. It was alleged in
the above complaint by the complainant that the respondent-Advocate
received two cheques bearing No.651851 for Rs.25,000/- dated
25.06.1995 and cheque bearing No.651853 for Rs.1,25,000/-, dated
25.08.1995 and the complainant received Rs.10,000/- from the purchaser
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CCCA Nos.119&155 of 2006
and when the complainant asked the respondent-Advocate to deposit the
said two cheques received by him, the later dragged on the matter on one
pretext or the other and after four months, the respondent-Advocate
returned the cheques to Smt. Sharada Bai (defendant No.1 in the present
case) with a malafide intention.
25. The respondent-Advocate in the said complaint offered his
comments stating that he was engaged by the complainant (plaintiff in the
present case) in three cases i.e. O.S.No.1831 of 1994 filed by G. Prameela
Bai against the complainant in the court of III Assistant Judge, City Civil
Court, Hyderabad and R.C. No.492 of 1994 on the file of the Principal
Rent Controller, Hyderabad and in R.C. No.442 of 1994 on the file of the
II Additional Rent Controller, Hyderabad and all the cases were pertaining
to the property bearing No.4-5-260 to 264, Esamiabazar, Hyderabad and
during the pendency of O.S. No.1831 of 1994 both the parties
compromised and a settlement deed was executed on 28.04.1995. Under
the said settlement, the complainant and Smt. Prameela Bai agreed to sell
the disputed property and received the sale consideration in the ratio of
2:3 respectively. The property was sold for Rs.5,09,000/- under registered
sale deeds dated 31.05.1995 and 01.06.1995. According to the settlement,
Smt. Prameela Bai received Rs.3,00,000/- and the complainant received
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CCCA Nos.119&155 of 2006
Rs.2,00,000/-. He denied that he mediated the sale transaction and that
had he received a sum of Rs.50,000/- from Smt. Sharada Bai. He stated
that the complainant had received his share of sale consideration from
Smt. Sharada Bai under four receipts. On 23.05.1995 the complainant,
after receiving Rs.50,000/- from Sharada Bai, approached him to
introduce him to open a bank account and accordingly, he introduced the
complainant, on which a bank account was opened in Syndicate Bank,
Kachiguda Branch.
26. During the course of enquiry before the Bar Council of A.P.,
the original receipts were also filed by the respondent Advocate and the
same were marked as Exs.R10, R11, R13 and R14. The complainant
disputed his signatures on the said receipts and as such, the said receipts
were sent to the Director, A.P. Forensic Science Laboratory for
examination. The Assistant Director, who examined the said signatures,
gave her opinion that the person, who wrote the standard signatures, did
not write the questioned signatures.
27. Considering the evidence on record, the Disciplinary
Committee of the Bar Council of A.P., opined that the respondent
Advocate not only produced the original fabricated receipts, but also
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CCCA Nos.119&155 of 2006
vehemently and assertively sought to establish to prove the fabricated
receipts as genuine one and hence, opined that the respondent Advocate
had colluded with Smt. Sharada Bai (defendant No.1) and her husband
Harilal in setting up a false case of alleged cash payment to the
complainant under Ex.R13 and R14 in lieu of two cheques and the
respondent Advocate was behind it and responsible for the filing of the
forged stamped receipts and considered it as a grave professional
misconduct and directed to remove his name from the rolls of the Bar
Council.
28. The respondent-Advocate challenged the said order before
the Bar Council of India. The certified copy of the order of the
Disciplinary Committee of the Bar Council of India was marked as
Ex.B56 by the defendants. The Disciplinary Committee of the Bar
Council of India in DC Appeal No.18 of 1998 on reappraising the
evidence on record, observed that the complainant failed to adduce any
evidence, oral and documentary to substantiate his allegation against the
appellant therein (Advocate) and Exs.R7 and R8 would prove that the
complainant had received post-dated cheques from the purchaser and the
same were subsequently handed over to the purchaser after receiving cash
in lieu of those post dated cheques and as such, allowed the appeal by
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CCCA Nos.119&155 of 2006
setting aside the order passed by the Disciplinary Committee No.V of the
Bar Council of A.P. in Complaint Case No.63 of 1996.
29. The son of the defendant No.1 and the owner of the adjoining
property, who purchased another half of the house bearing No.4-6-260 to
264 out of 185 sq. yds., situated at Esamiabazar, Hyderabad, from Smt.
Prameela Bai and the plaintiff herein jointly, was examined as DW.1. He
gave evidence as the Special Power of Attorney holder of DW.1 on behalf
of his mother. He stated that Mr. Narsing Rao Chavan (the original
plaintiff) and Smt. Prameela Bai offered to sell part of the house bearing
No.4-6-260 to 264 admeasuring 92.5 sq. yds., and they agreed to purchase
the same and accordingly, Smt. Prameela Bai as well as Mr. Narsing Rao
Chavan executed a registered sale deed in his favour by receiving the
entire sale consideration on 27.05.1995. They also requested to purchase
another part of the said land, which was the suit schedule property. They
had expressed their inability to pay the entire sale consideration
immediately. As such, Mr. Narsing Rao Chavan, as well as Smt.
Prameela Bai requested them to pay part of the sale consideration and for
the remaining amount requested for issuance of cheques. To avoid future
complications, if Prameela Bai could not turn up to execute a registered
sale deed as unnecessarily the matter would be pending, on the request of
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CCCA Nos.119&155 of 2006
Mr. Narasing Rao Chavan, they paid part sale consideration of
Rs.25,000/- on 25.04.1995 and a sum of Rs.25,000/- on 28.05.1995 and
for the balance consideration, they issued two post dated cheques on
26.05.1995 at the time of registration of the sale deed vide cheque bearing
No.651851 dated 25.06.1995 for Rs.25,000/- and cheque bearing
No.651853 dated 25.08.1995 for Rs.1,25,000/- in favour of the plaintiff
Mr. Narsing Rao Chavan on the condition that after receipt of the amount,
Mr. Narsing Rao Chavan had to return the cheques respectively to them or
he has to deposit the said cheques for realization.
30. DW.1 further stated that they were informed that Mr. Narsing
Rao Chavan was not having any account as such, requested for payment
by way of cash. He stated that the entire transaction took place in the
presence of Mr. V. Rajagopal, Advocate. The said Rajagopal was the
counsel for the plaintiff and all the sale deeds were prepared by him only
and the entire payments were made in the presence of Mr. Rajagopal,
Advocate. He further contended that after receipt of the amount in cash,
the cheques were returned to them.
31. In his cross-examination, he stated that defendant No.1, i.e.
his mother and his father did not obtain any acknowledgment of receipt
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CCCA Nos.119&155 of 2006
showing that the plaintiff received the amount in lieu of two cheques. He
stated that he was not aware that his father filed the two receipts marked
as Exs.R13 and R14 in the Complaint Case No.63 of 1996 and that his
father deposed in that case that the plaintiff on receipt of cash in lieu of
cheques passed the receipts.
32. The evidence of DW.1,the Special Power of Attorney holder
of defendant No.1 is against the stand taken by defendant No.1 in her
written statement wherein defendant No.1 stated that the cheques were
returned to the defendant No.1 by collecting cash from her in lieu of the
said cheques on 26.06.1995 and 29.08.1992 and in token of receipt of the
amount in lieu of the cheques, the plaintiff executed the receipts dated
22.06.1995 and 24.08.1995. Thus, defendant No.1 stated about executing
the receipts but DW.1 denied that his mother and father did not take any
acknowledgement of receipt showing that the plaintiff received the
amount in lieu of the cheques. DW.4 also stated about passing of the
receipts by the plaintiff when amount was paid in cash in lieu of cheques.
Thus, the evidence of DW.1 that no receipts were passed cannot be relied
upon. DW.1 admitted that defendant No.1 had no proof of payment of
Rs.1,50,000/- i.e. two cheque amounts to the plaintiff. He also stated that
defendant No.1 sold the property to defendant No.2.
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CCCA Nos.119&155 of 2006
33. The defendants also got examined DW.2 to prove that he was
also present at the time of payment of Rs.1,25,000/- to the plaintiff. DW.2
stated that he arranged a sum of Rs.75,000/- to defendant No.1 and he
along with Harilal (DW.4) and Sanjay Kumar (DW,1) went to the house
of Mr. Narsing Rao Chavan (Plaintiff) and paid Rs.1,25,000/- to him
in the presence of Mr. Rajagopal-Advocate and after receipt of
Rs.1,25,000/-, Mr. Narsing Rao Chavan had returned the cheque for
Rs.1,25,000/- to the defendants in his presence.
34. The evidence of this witness is silent about passing of any
receipt by the plaintiff in token of receiving cash in lieu of the cheque.
The presence of this witness was not stated by defendant No.1 in her
written statement or not stated by DW.1 in his evidence affidavit. No
document was filed by DW.2 in proof of arranging the sum of Rs.75,000/-
to defendant No.1. No date was even mentioned by him as to when he
arranged the amount of Rs.75,000/- to defendant No.1. No bank statement
was filed by him to show that he was having that much amount in his
account and as to when he withdrew the same and given to the defendant
No.1 for payment of the same to the plaintiff. Thus, no reliance can be
placed upon his oral evidence to believe that he was present at the time of
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CCCA Nos.119&155 of 2006
the said transaction and that an amount of Rs.1,25,000/- was paid by
defendant No.1 to the plaintiff.
35. The father of DW.1 and the husband of defendant No.1 was
examined as DW4. DW.4 stated that Prameela Bai and Narsing Rao
Chavan approached them and offered to sell the schedule of property for a
consideration of Rs.5,00,000/- out of which Mr. Narsing Rao Chavan is
entitled to Rs.2,00,000/- and Smt. Prameela Bai was entitled for
Rs.3,00,000/-. Accordingly, part of the house bearing No.4-6-260 to 264
admeasuring 92.5 sq. yds., of property was executed by them in favour of
Mr. Sanjay Kumar (DW.1), who was his son and part of the schedule or
property admeasuring 92.5 sq. yds., was executed by Narsing Rao Chavan
and Prameela Bai in favour of his wife Smt. Sharada Bai (defendant No.1)
by receiving a sum of Rs.3,50,000/- and for balance sale consideration of
Rs.1,50,000/- they have given two post dated cheques for Rs.25,000/- and
for Rs.1,25,000/-, dated 25.06.1995 dated 25.08.1995, respectively. Mr.
Rajagopal, Advocate was the counsel of Mr. Narsing Rao Chavan and
both the parties used to act on his advice and on his advice, he issued two
post dated cheques to Mr. Narsing Rao Chavan. As per his information,
out of Rs.3,50,000/- Smt. Prameela bai had received Rs.3,00,000/- and the
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CCCA Nos.119&155 of 2006
balance amount of Rs.1,50,000/- was received by Mr. Narsing Rao
Chavan.
36. DW.4 further stated that later Mr. Narsing Rao Chavan
approached him and requested him to pay the amount by way of cash as
he was in urgent need of money and that he had not opened any account.
Believing the version of Mr. Narsing Rao Chavan, they had paid a sum of
Rs.25,000/- three days preceding the date of cheque i.e. on 22.06.1995.
The plaintiff received the amount and returned the cheque and passed a
receipt on 22.06.1995 and on the request of the plaintiff, they had paid a
sum of Rs.1,25,000/- by way of cash on 24.08.1995 in the presence of Mr.
Harimohan, S.K. Karanlal, Sanjay Kumar etc., and Mr. Narsing Rao
Chavan passed a separate receipt for the said amount. He stated that the
original receipts were taken by Mr. Rajagopal-Advocate and when he
objected for the same, the advocate informed that as already post dated
cheques had been returned which were lying with them and already sale
deed was executed by both the parties and amounts were paid against the
cheques, they would not face any problem. He further contended that if
there was any dispute between Mr. Narsing Rao Chavan and Mr.
Rajagopal, Mr. Narsing Rao Chavan would need to file a suit against Mr.
39
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CCCA Nos.119&155 of 2006
Rajagopal and that without receipt of the sale consideration against the
cheques, nobody would return the cheques to the party.
37. In his cross examination, DW.4 admitted that he was
examined as RW.2 before the Bar Council of A.P., on behalf of V.
Rajagopal, Advocate in the case filed by plaintiff No.1. He denied that he
gave two post-dated cheques to Rajagopal, Advocate. He stated that he
paid Rs.25,000/- by way of cash to plaintiff No.1 on 22.06.1995 and
obtained receipt from him and also obtained receipt for payment of
Rs.1,25,000/- to the plaintiff on 24.08.1995.
38. Thus, DW.4 admitted that there were receipts passed by the
plaintiff No.1 when the defendant No.1 paid the amount in cash in lieu of
cheques. But, the said receipts were not filed before the Court. His
contention was that the original receipts were taken by Mr. Rajagopal for
filing the same in Complaint Case No.63 of 1996. Not obtaining the
original receipts filed before the Complaint Case No.63 of 1996 and not
filing the same before the civil court would raise a strong suspicion over
the case of the defendants, particularly, in view of the observation of the
Disciplinary Committee No.V of the Bar Council of A.P. wherein the said
receipts were sent to the expert and basing on the expert opinion, found
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Dr.GRR,J
CCCA Nos.119&155 of 2006
them to be fabricated. The Disciplinary Committee of Bar Council of
India observed that as the stand of both RW.1 (Respondent-Advocate) and
RW.2 (Harilal, husband of defendant No.1 examined as DW.4 in this
case) was that the original money receipts were there with RW.2 which
were handed over to RW.1 for production of the same before the Bar
Council, under such circumstances, even if the evidence of CW.2 (hand
writing expert) was relied upon, any manipulation of forgery of the money
receipts on the part of RW.2 could not be ruled out and further observed
that in the absence of any cogent material or evidence worth believing, it
was not safe to conclude that the advocate had forged the money receipts
after returning the post dated cheques to the purchaser.
39. Thus, a suspicion would raise that either the Advocate V.
Rajagopal or DW.4 herein might have forged the money receipts. The
defendant No.1 ought to have examined the said Advocate Rajagopal to
whom he handed over the original receipts, as a witness on his behalf to
prove the said fact or ought to have filed the original receipts in proof of
his contention of payment of the amounts of Rs.25,000/- and
Rs.1,25,000/- in cash in lieu of cheques issued by defendant No.1.
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CCCA Nos.119&155 of 2006
40. The contention of the learned counsel for the defendant No.2
was that producing the original cheques by the defendant No.1 itself could
be considered as an acknowledgment in proof of payment of money in
cash and without the payment of money, the cheques would not have been
returned to defendant No.1. But, filing of the original cheques by
defendant No.1 itself cannot be considered as proof of payment of cash in
lieu of the cheques, when the plaintiff was contending about the collusion
between his counsel Rajagopal and defendant No.1 and handing over the
original cheques to defendant No.1 by his counsel without his consent and
without payment of any cash to him. DW.4 examining on behalf of the
Advocate Rajagopal in Complaint Case No.63 of 1996 as RW.2 and non-
filing of the receipts in this case, strengthens the allegation of collusion
made by the plaintiff against them. The opinion of the Disciplinary
Committee of the Bar Council of A.P. about the fabrication of receipts
was not set aside by the Disciplinary Committee of Bar Council of India.
In view of the evidence of handwriting expert before the Bar Council of
A.P., the fabrication of receipts is proved which was also affirmed by the
Bar Council of India. The Bar Council of India exonerated the advocate
from the allegations made against him raising suspicion that the
fabrication of receipts by RW.2 cannot be ruled out. As such, the same
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CCCA Nos.119&155 of 2006
would prove that there is fabrication of receipts but there is no conclusive
proof as to who fabricated them, which probabilises the allegation of
forgery and collusion between the Advocate Rajagopal and DW.4.
41. As the plaintiff – vendor was able to prove his case by
preponderance of probability that he was not paid full consideration due to
the fraud and collusion between defendant No.1 and his Advocate
Rajagopal, and as there is a condition precedent incorporated in the sale
deed itself that if consideration was not paid in full, the sale deed is liable
to be cancelled, the sale is not complete and the sale deed can be
cancelled.
42. The contention of the learned counsel for the appellants –
defendant Nos.1 and 2 that the cheques were not presented by the plaintiff
and as the same were not dishonoured empowering the vendors to cancel
the sale deed, could not be given much importance, as the evidence of
PW.1 would establish that the cheques were kept in the possession of their
counsel Sri Rajagopal and that their counsel had returned the cheques to
defendant No.1, without the consent of the plaintiff. The conduct of the
plaintiff No.1 filing a case against his own Advocate for taking action
against him before the Bar Council of A.P. itself would show that he had
43
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CCCA Nos.119&155 of 2006
not received the amount in cash in lieu of the cheques, due to which he
went to such an extent of lodging the complaint against his own counsel
for handing over the cheques to defendant No.1 without payment of the
balance sale consideration amount to him. As such, point No.1 is
answered in favour of the respondents-plaintiffs as against the appellants-
defendant Nos.1 and 2 holding that the plaintiffs are entitled for
cancellation of the sale deed dated 26.05.1995 executed by the original
plaintiff (plaintiff No.1) in favour of defendant No.1.
43. POINT No.3:
The defendant No.2 examined himself as DW.3. He stated that he
purchased the suit schedule property by paying total sale consideration
from defendant No.1 through agreement of sale dated 19.12.1996 and ever
since the date of purchase he was in possession and enjoyment of the
same. He also stated that he constructed a house by investing huge
amount. He contended that he was a bonafide purchaser of the suit
schedule property. The unregistered agreement of sale dated 19.12.1996
was marked as Ex.B4. The said document was validated by impounding
the same on 16.06.2004. No registered sale deed was obtained by
defendant No.2 from defendant No.1 in his favour since the date of
agreement of sale on 19.12.1996. This itself raises a suspicion over the
44
Dr.GRR,J
CCCA Nos.119&155 of 2006bonafide nature of the above transaction. As no bonafide purchaser would
remain silent without obtaining a registered sale deed executed in his
favour after entering into the agreement of sale. It also raises a suspicion
over the conduct of defendant Nos.1 and 2 that the agreement of sale was
hurriedly executed with a prior date to the date of filing of the suit after
receipt of notice from the defendant. No absolute rights over the property
could be conveyed through agreement of sale. As such, the defendant
No.2 cannot be considered as a bonafide purchaser.
44. The contention of the learned counsel for the respondents-
plaintiffs was that at the stage of issuing notices, the property was sold by
defendant Nos.1 and 2, as such, the doctrine of lis pendens attracts. Even
if DW.3 (defendant No.2) is considered as a bonafide purchaser that he
purchased the property without notice of prior claim, the doctrine of lis
pendens overrides the rights of a bonafide purchaser. No notice either
actual or constructive of the pending litigation, is required under Section
52 of the Transfer of Property Act. The mere existence of the suit is
enough to bind the purchaser. The object of the doctrine is to prevent
multiplicity of the litigation during the pendency of suit. The transfer
made by defendant No.1 to defendant No.2 conveying the property is
subject to the rights declared by the court in the litigation. As such, even
45
Dr.GRR,J
CCCA Nos.119&155 of 2006
though the purchase of property is valid, it would be subject to the
outcome of the suit. Defendant No.2 cannot claim any protection on the
ground of bonafide purchaser. His remedies lie in seeking restitution or
damages from his seller, but he could not avoid the effect of the judgment
in the pending suit. As such, point No.2 is answered holding that the
agreement made by defendant No.1 in favour of defendant No.2 was
bound by the doctrine of lis pendens.
45. POINT No.4:
As the judgment of the trial court is in accordance with law and
facts on record, this Court does not find any illegality to set aside the
same.
46. POINT No.5:
In the result, both the appeals filed by defendant No.1 and
defendant No.2 are dismissed confirming the judgment and decree dated
25.04.1997 passed in O.S .No.28 of 1997 by the IV Senior Civil Judge,
City Civil Court, Hyderabad. No costs.
Miscellaneous Applications pending, if any, shall stand closed.
_____________________
Dr. G.RADHA RANI, J
Date:02.05.2025
KTL
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