Mammen John v. Abraham @ Avarachan, Lizy Mathew, Mathew Varghese and Ann Mathew

# **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT** **THE HONOURABLE MR. JUSTICE A.HARIPRASAD** **THURSDAY ,THE 21ST DAY OF FEBRUARY 2019 / 2ND PHALGUNA, 1940** ## **AS.No. 167 of 2002** **AGAINST THE JUDGMENT AND DECREE DATED 28.9.2001 IN OS NO.4/1995 of PRINCIPAL SUB COURT,ERNAKULAM** ## **APPELLANT/PLAINTIFF:** **MAMMEN JOHN, AGED 49 YEARS, SON OF YOHANNAN, RESIDING AT GRACE COTTAGE D.NO.35/215, POWER HOUSE ROAD, PALARIVATTOM,KOCHI - 682 025.** **BY ADV. SRI.K.K.CHANDRAN PILLAI (SENIOR ADVOCATE)** ## **RESPONDENTS/DEFENDANTS:** |**1**|**ABRAHAM @ AVARACHAN, SON OF OUSEPH,**| |---|---| ||**KUZHUPILLY HOUSE, CHERUMATTAPUZHA KARA,**| ||**VAZHAKALA, ERNAKULAM.**| |**2**|**LIZY MATHEW, WIFE OF MATHEW, KUZHUPILLY**| ||**HOUSE, CHERUMATTAPUZHA KARA,**| ||**VAZHAKALA,ERNAKULAM.**| |**3**|**MATHEW VARGHESE, SON OF GEEVARGHESE,**| ||**ELANGAVATH HOUSE,5/815 FERRY ROAD,(3RD**| ||**BUILDING), OPPOSITE PREMIER TYRES,**| ||**NORTH KALAMASSERY - 683 104.**| |**4**|**ANN MATHEW, WIFE OF MATHEW VARGHESE,**| ||**ELANGAVATH HOUSE, 5/815 FERRY ROAD, (3RD**| ||**BUILDING), OPPOSITE PREMIER TYRES,**| ||**NORTH KALAMASSERY-683 104.**| A.S.No.167 of 2002 2 ## **NOW RESIDING AT -DO-** **R3 AND R4 BY ADVS.SRI.K.J.GEORGE SRI.A.V.GEORGE R2 BY ADVS.SRI.JOHNSON ABRAHAM SRI.VINCENT PIOUS SRI.NELSON ABRAHAM** **R1 BY ADVS.SRI.V.K.BALACHANDRAN SRI.LATHEESH SEBASTIAN** **THIS APPEAL SUITS HAVING BEEN FINALLY HEARD ON 21.02.2019, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:** A.S.No.167 of 2002 3 ## **A.HARIPRASAD, J.** ## **-------------------------------------A.S.No.167 of 2002 -------------------------------------Dated this the 21[st] day of February, 2019 JUDGMENT** Heard the learned senior counsel appearing for the appellant. Despite continuing this old appeal in the hearing list for a long time, there is no representation for the respondents. 2. This appeal is filed by the plaintiff in O.S.No.4 of 1995 before the Court of Principal Sub Judge, Ernakulam. The suit is one for specific performance of a contract for sale of immovable property evidenced by Ext.A1 document. It is the case of the plaintiff that the plaint schedule property, having an extent of 20 cents, belonged to the 1[st] defendant. He agreed to sell the property to the plaintiff for a consideration of `25,000/- per cent by executing Ext.A1 on 08.07.1994. An amount of `1,00,000/- was paid on the date of execution of Ext.A1. Term of the contract fixed was three months from the date of its execution. However, it is clear from Ext.A1 as well as from the plaint averments that the parties did not treat time as essence of the contract. 1[st] defendant had to measure out the property for ascertaining the actual extent and to obtain a survey sketch. He had to obtain an encumbrance certificate for 13 years and also to give basic tax receipts to evidence his title and possession. It A.S.No.167 of 2002 4 was represented by the 1[st] defendant that his original title deed was lost. Therefore, he had to make a publication in a news paper in respect of that fact. The plaintiff was always ready and willing to perform his part of the contract. 1[st] defendant failed in effecting the required paper publication. Therefore, the plaintiff had to do it at his expense. The property was measured on 02.11.1994. Survey sketch, encumbrance certificate and tax receipts were handed over to the plaintiff in the last week of November, 1994. 1[st] defendant assured to get income tax clearance certificate by 15.12.1994. All these facts would show that the parties never intended to treat time as essence of the contract. However, the 1[st] defendant, in order to wriggle out from his contractual obligations, sold out the property in favour of another person on 28.12.1994 as per Ext.A8 document. Therefore she was impleaded as the additional 2[nd] defendant. Thereafter the plaintiff filed the suit on 02.01.1995. Pending the suit, in violation of an order of injunction passed against the additional 2[nd] defendant, she sold out the property in favour of two other persons. Subsequently they were also impleaded as additional defendants 3 and 4. According to the plaint averments, the transactions made by the defendants pending the suit are with an intention to defeat the interest of the plaintiff. The plaint was later amended limiting the claim for return of advance amount only with interest, virtually giving up the claim for specific performance of the contract. 3. 1[st] defendant remained absent and he was set exparte. Additional 2[nd] defendant filed a written statement contending that she was A.S.No.167 of 2002 5 not aware of the agreement for sale between the plaintiff and the 1[st] defendant. She is a bonafide purchaser of the property for value. She is not liable to be proceeded against and no relief can be claimed by the plaintiff against her. 4. Additional defendants 3 and 4 purchased the property pending litigation and they also opposed the suit. 5. Court below framed necessary issues. Exts.A1 to A9 and B1 to B11 are the documents marked. PW1 and DWs 1 and 2 were examined. Court below after considering the matters, decreed the suit in part granting a money decree in favour of the appellant directing the defendants to pay a sum of `2,80,233.21 with interest thereon at the rate of 12% per annum from the date of suit till realisation and also the costs. The appellant is aggrieved by some observations made by the trial court in the decreetal portion. 6. Learned senior counsel for the appellant submitted that the court below committed a serious mistake in not granting a charge decree under Section 55(6)(b) of the Transfer of Property Act, 1882 (in short, “the Act”) in favour of the appellant and against the plaint property. Section 55(6)(b) of the Act reads as follows: ## _“_ _**55. Rights and liabilities of buyer and seller** .-In the_ _absence of a contract to the contrary, the buyer and the seller of immovable property respectively are subject to the liabilities, and have the rights, mentioned in the rules next following or_ A.S.No.167 of 2002 6 ## _such of them as are applicable to the property sold_ ## _(6) The buyer is entitled-_ _(b) unless he has improperly declined to accept delivery of the property, to a charge on the property, as against the seller and all persons claiming under him, to the extent of the seller's interest in the property, for the amount of any purchase money properly paid by the buyer in anticipation of the delivery and for interest on such amount; and, when he properly declines to accept the delivery, also for the earnest (if any) and for the costs (if any) awarded to him of a suit to compel specific performance of the contract or to obtain a decree for its rescission.”_ On a perusal of the Section, it can be seen that unless the buyer (here the plaintiff) has improperly declined to accept delivery of the property, a statutory charge will be created on the property as against the seller (here the 1[st] defendant) and all persons claiming under him to the extent of the seller's interest in the property. The charge will be for the amount of any purchase money properly paid by the buyer in anticipation of delivery and also for interest on such amount. Here, in order to impress upon this Court that the appellant/plaintiff did not improperly decline to perform his obligations under the contract, learned senior counsel relied on Exts.A2 to A6 which will go to show that the buyer had performed his part. Ext.A6 is an unregistered sale deed prepared by the document writer in anticipation A.S.No.167 of 2002 7 of the 1[st] defendant executing the same in favour of the plaintiff. It is evident from these records and also from the testimony of PW1 that the parties never intended to treat time as essence of the contract. There is no material on record to show that the 1[st] defendant ever made time as the essence of contract by any subsequent conduct. 7. Learned senior counsel pointed out that the court below lost sight of the fact that the 1[st] defendant did not contest the case which will indicate that the other defendants were not competent to dispute the readiness and willingness expressed by the plaintiff in a contract between himself and 1[st] defendant. According to the averments in the written statements of other defendants, they were not aware of the Ext.A1 contract between the 1[st] defendant and plaintiff at the time of their respective purchases. Therefore, they cannot oppose the contentions of the plaintiff that he was ready and willing to perform his contractual obligations and the contract did not go through merely on account of the breach committed by 1[st] defendant. The materials on record would show that the appellant at no point of time declined to perform his part of the contractual obligations. Because of the compelling reasons, he had abandoned the claim for specific performance and confined it to return of advance amount. 8. Learned senior counsel relying on a decision in **Ayyakutty Chettiar v. Imbichiamina Bi (1962 KLT 728** ) contended that the principle therein was not considered by the court below in the correct perspective. The law declared in paragraph 2 of the above decision reads as follows: A.S.No.167 of 2002 8 _“S.55(6)(b) provides that, on the fulfilment of certain conditions, where the sale has not been completed, the buyer is entitled to a charge on the property, as against the seller and all persons claiming under him, to the extent of the seller's interest in the property, for the amounts of any purchase money properly paid by him. It is plain that under this section, the charge is enforceable against all persons claiming under the seller, whether they have notice of the charge or not. S.55(6)(b) is a special provision while S.100 is a general provision which must therefore yield to the former.”_ The same principle was reiterated by this Court in **Ibrayi v. Pokkan (1989 (1) KLT 581** ). 9. The above decisions would make it clear that the plea raised by the defendants 2 to 4 that they were not aware of the existence of Ext.A1 contract between the plaintiff and 1[st] defendant in respect of the property will be of no avail to avert the creation of a statutory charge under Section 55(6)(b) of the Act. 10. Supreme Court in **Delhi Development Authority v. Skipper Construction Co.(P) Ltd. (AIR 2000 SC 573)** has considered the scope of Section 55(6)(b) of the Act and held thus: _“29. …........ It is plain from the above provision that, in the absence of a contract to the contrary, the buyer will have a charge on the seller's interest in the property which is the subject_ A.S.No.167 of 2002 9 _matter of the sale agreement insofar as the purchase money and interest on such amount are concerned, unless the buyer has improperly declined to accept delivery. The charge is available against the seller and all persons claiming under him. This charge in favour of the buyer is the converse of the seller's charge under Section 55(4)(b). The buyer's charge under the Section is a statutory charge and differs from a contractual charge which a buyer may be entitled to claim under a separate contract (Chettiar Firm v.Chettiar), AIR 1941 PC 47. No charge is available unless the agreement is genuine. (T.N.Hardas v. Babulal, AIR 1973 SC 1363). As pointed out in Mulla's Commentary of Transfer of Property Act, 8[th] Ed. (P.411), the charge on the property under Section 55(6)(b) is enforceable not only against the seller but against all persons claiming under him. Before the amending Act of 1929, the words 'with notice of payment' occurred after the words “all the persons claiming under him”. These words were omitted as they allowed a transferee without notice to escape. After the Amendment of 1929, notice to the purchaser has now become irrelevant._ _30. When the property upon which the charge is created gets converted into another form, the buyer will be entitled to proceed against the substituted security. This is a general principle of law and Section 73 of the Transfer of Property Act is_ A.S.No.167 of 2002 10 _only an example of the said principle. The above principle has been applied to enforce mortgage on substituted securities (see Barham Deo Prasad v. Tara Chand, (1913) 41 Ind App 45 (PC) and Muniappa v. Subbaiah, (AIR 1917 Mad 880). The same principle which is applicable to mortgages applies to cases of statutory charge under Section 55(6)(b). If immovable property is charged and is converted into another property or money, then the charge will fasten on the property or money into which the subject-matter of the agreement is converted.”_ 11. In order to buttress the contention that a charge under Section 55(6)(b) of the Act will be applicable even in the case of a transferee without notice, a division bench decision of this Court in **Sebastian v. Bipin (2004 (1) KLT 159)** is pressed into service. The same principle has been reiterated in a recent division bench decision of this Court in **Krishnamenon v. Pradeep Kumar (2017 (1) KLT 429** ). 12. Having regard to the judicial pronouncements and also to the statutory provision, I am of view that the court below committed a grave error in decreeing the suit without recognizing the charge created on the property in favour of the plaintiff. Therefore, an interference is required to this extent. In the result, the appeal is allowed. Decree passed by the court below is modified. The appellant/plaintiff is entitled to recover `2,80,233.21 with 12% interest per annum from the date of suit till A.S.No.167 of 2002 11 realisation with costs from the 1[st] defendant. It is made clear that there shall be a charge on the plaint schedule property under Section 55(6)(b) of the Act for the amount, interest and costs and the appellant is entitled to proceed against the 1[st] defendant and also against the property for recovery of the amounts. 1[st] defendant shall pay costs of the appellant in this appeal also. All pending interlocutory applications will stand closed. **A.HARIPRASAD, JUDGE.** ## **cks** A.S.No.167 of 2002 12 ## **A.Hariprasad, J.** **A.S.No.167 of 2002** ## **JUDGMENT** **21[st] February, 2019**