Suman D/o Sumathi and Sumathi D/o Gowri v. Suresh

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT** **THE HONOURABLE MR. JUSTICE P.SOMARAJAN** **THURSDAY, THE 29TH DAY OF AUGUST 2019 / 7TH BHADRA, 1941** ## **RSA.No.579 OF 2010** **AGAINST THE DECREE & JUDGMENT IN AS 213/2006 DATED 23-12-2009 OF II ADDITIONAL DISTRICT COURT, KOLLAM** **AGAINST THE DECREE & JUDGMENT IN OS 78/2000 DATED 30-06-2006 OF MUNSIFF'S COURT, PARAVOOR** ## **APPELLANTS/APPELLANTS/DEFENDANTS:** **1 SUMAN D/O. SUMATHI, VANIYAKKATTU PUTHEN VEEDU, KOTTAPPURAM CHERRY, KOTTAPPURAM VILLAGE, KOLLAM 2 SUMATHI D/O. GOWRI, VANIYAKKATTU PUTHEN VEEDU, KOTTAPPURAM CHERRY, KOTTAPPURAM VILLAGE, KOLLAM** **BY ADV. SRI.G.S.REGHUNATH** ## **RESPONDENT/RESPONDENT/PLAINTIFF:** ## **SURESH** **S/O NATARAJA SASTHRI, SURESH BHAVAN, PUTHENKULAM, POOTHAKULAM CHERRY, POOTHAKULAM VILLAGE, KOLLAM** ## **R1 BY ADV. SRI.G.SREEKUMAR CHELUR** **THIS REGULAR SECOND APPEAL HAVING BEEN FINALLY HEARD ON 29.08.2019, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:** R.S.A.No.579/2010 2 ## **JUDGMENT** A suit for declaration of title and recovery of possession decreed by the trial court and the first appellate court. The counter claim raised by the defendant was rejected. Aggrieved by the said concurrent finding of both the courts below, the defendants came up with this appeal. 2. The subject matter of the suit constitute 16 cents of property originally belonged to one Nani Bhavani by virtue of Ext.B5 partition of the year 1950. She executed Ext.A2 sale deed in the year 1982 in favour of one Nataraja Sasthri with respect to the said property. Nataraja Sasthri in turn executed Ext.A3 gift deed of the year 1982 by which the said property was given to his wife Velammal and her children. Thereafter Velammal and her children through their power holder had given the said property to the plaintiff under Ext.A1 sale deed on 21.08.1990. 3. The defendant contested the suit mainly on the reason that the original title holder Nani Bhavani had executed Ext.B3 registered Will in the year 1987 declaring that Ext.A2 sale deed executed by her is only R.S.A.No.579/2010 3 a sham document and bequeathed the property to them. While so, they instituted a suit in O.S.No.173/1991 against the above said Nataraja Sastri and obtained a decree of permanent prohibitory injunction dated 18.3.1992 against trespass and interfering with the peaceful possession and enjoyment of the property. Subsequently, another suit was also filed by the defendants against the plaintiff in O.S.No.51/1992. Ext.B2 is the decree of injunction granted. It is an ex parte decree based on which it was contended that the present suit would stand hit by Section 11 C.P.C. Both the trial court and the first appellate court decreed the suit and the counter claim raised for a declaration that Ext.A1 sale deed is not binding on the defendants was rejected. Aggrieved by the said decree and judgment, the defendants came up with this appeal. 4. Various arguments were raised by the learned counsel for the appellants disputing the very nature of Ext.A2 sale deed executed by the original owner of the property Nani Bhavani. Inter alia, it was contended that Nataraja Sasthri, Velammal and her children are Singapore citizens and as such Ext.A3 gift deed and R.S.A.No.579/2010 4 Ext.A2 sale deed are hit by Section 31 of Foreign Exchange Regulation Act coupled with Section 23 of Contract Act. It was contended that since there is no permission/sanction obtained from RBI, the document would stand as void. Yet another argument was also advanced by the learned counsel for the appellants that they have produced certain documents under Order 41 Rule 27 C.P.C. as additional evidence in the first appellate court, but that has not been taken into account and the said application was not disposed of by the first appellate court, without which a judgment was rendered on the disputed issue. Based on the decision rendered by the Apex Court in **Rattan Dev v. Pasam Devi [(2002) 7 SCC 441]** , it was submitted that the first appellate judgment lacking in several details and there is no discussion or adjudication with respect to the matters raised and involved in the suit by the first appellate court including the question of res judicata, the application of Section 31 of Foreign Exchange Regulation Act and Section 23 of the Contract Act. 5. One of the main contention raised by the R.S.A.No.579/2010 5 appellants is that Ext.A2 sale deed is a sham document executed by Nani Bhavani. It is a registered sale deed by which the plaint schedule property was sold to Nataraja Sasthri for valid consideration. It is of the year 1982. No suit admittedly filed either by Nani Bhavani or any other person litigating under her either to set aside the above said Ext.A2 sale deed or to declare the same as sham document and the time available for setting aside the document or for a declaration that the document is a sham document now stood barred by limitation by the lapse of more than three years and 12 years from the date of execution and registration of Ext.A2 sale deed. Of course, the subsequent Will- Ext.B3 was executed in the year 1987, after five years from the date of execution of Ext.A2 by the original owner asserting that Ext.A2 sale deed is a sham document. The unilateral declaration and assertion made by the seller subsequent to the sale that too in derogation of the right conveyed under the registered sale deed is of no use. As such the Will, Ext.B3, has no legal effect at all. Admittedly, the defendants are persons claiming under Ext.B3 Will. When R.S.A.No.579/2010 6 Ext.B3 Will goes and no right will be conferred on the defendants under Ext.B3, their status with respect to the property, the subject matter of the suit, would be as total strangers. Of course, earlier, the defendants opted to file a suit in O.S.No.173/1991 and obtained a decree of injunction under Ext.B1 along with the original owner Nalini Bhavani and decree was granted on 18.3.1992. That suit was filed in the year 1991 against Nataraja Sasthri and two other persons. By that time, Nataraja Sastri parted with his right, title and interest over the property by virtue of Ext.A3 gift deed of the year 1982 in favour of Velammal and her children. Admittedly, Velammal and her children are not parties to the said suit. In fact, Ext.B1 decree is only against prior owners, who had parted with every right over the plaint schedule property. It would not either bind on the beneficiary under Ext.A1 document i.e Velammal and her children or the plaintiff. Another subsequent decree was also obtained under Ext.B2 by instituting a suit in O.S.No.51/1992 against the plaintiff herein by the defendants wherein also an ex parte decree was obtained by way of a decree of R.S.A.No.579/2010 7 injunction against trespass. No doubt, an ex parte decree would bind on the defendants. But that suit was filed only for the purpose of injunction simplicitor without touching on the question of title. A decree granted protecting possession cannot operate as res judicata in a subsequent suit by the original owner for declaration of their title and recovery of possession. As such, Ext.B2 decree would not act or operate as res judicata debarring the plaintiff from maintaining a suit for declaration of title or recovery of possession. 6. On coming to the question of application of Section 31 of the Foreign Exchange Regulation Act and Section 23 of the Contract Act, it is necessary to have an understanding with respect to what actually constitute Section 23 of the Contract Act, which is extracted below for reference: “23. **What consideration and objects are lawful, and what not** - The consideration or object of an agreement is lawful, unless - It is forbidden by law, or is of such a nature that, if permitted, it would defeat the provisions of any law; or is fraudulent; or involves or implies, injury to the person or property of another; or R.S.A.No.579/2010 8 the Court regards it as immoral, or opposed to public policy. In each of these cases, the consideration or object of an agreement is said to be unlawful. Every agreement of which the object or consideration is unlawful is void.” (emphasis supplied) 7. A mere perusal of Section 23 would show that it would come into play when either the consideration or the object of an agreement is forbidden by law or is of such a nature that if permitted would defeat the provisions of any law or is fraudulent or involves or implies injury to the person or the property of another or the court regards it as immoral or opposed to public policy. A mere non-compliance of a legal requirement for effectuating sale may not come under the purview of Section 23 of Contract Act, unless the consideration or the object of that sale deed is forbidden by law or would come under any other ground embodied under Section 23 of the Contract Act. As such non-compliance of a requirement as mandated under Section 31 of Foreign Exchange Regulation Act would not come under the purview of the Contract Act. Section 23 really deals with and covers the area wherein either the R.S.A.No.579/2010 9 consideration or the object of a contract either forbidden by law or fraudulent or would defeat any provisions of law or involves immorality or opposed to public policy. At the most, the document would stand as invalid due to the non-compliance of the requirement under Section 31 of Foreign Exchange Regulation Act, but it cannot be termed as void at its very inception. 8. Once the document is invalid due to noncompliance of any requirement or vitiated by any of the circumstance embodied under Section 15 and 18 of the Contract Act, there should be a suit for setting aside the document within the period of limitation. Even in a case of voidable document, the very same principle is applicable and there should be a suit for declaring the document as void. No suit was filed either for setting aside or for declaring the same as sham document or invalid document due to non-compliance of mandate under Section 31 of Foreign Exchange Regulation Act and hence the contention raised by the appellants cannot be sustained. 9 **.** Learned counsel also placed reliance on the decision of a Single Bench of this Court by referring R.S.A.No.579/2010 10 to paragraph 23 in **William Babu v. Helma Roy ( 2018 (1) KLT 828)** in order to canvas the legal position that non-compliance of Section 3 of Foreign Exchange Regulation Act would make the document illegal and void. But a different view was taken by a Division Bench of this Court in **Sebastian vs.Mathai (2005 (4) KLT 791)** . 10. Yet another ground was also advanced that the application submitted under Order 41 Rule 27 CPC was not considered by the first appellate court and the document produced along with the said application was not taken into account while rendering the judgment by the first appellate court. When there is an application under Order 41 Rule 27 CPC, it is mandatory that the first appellate court should pass an order on that application. But no order passed by the first appellate court on that application. No doubt, the non-consideration of an application under Order 41 Rule 27 CPC is a substantial question for the purpose of this appeal. But the document admittedly produced along with the application is the copy of plaint and the proceedings in the earlier two suits. It has no much 11 ## R.S.A.No.579/2010 relevance when there is production of Ext.B1 and B2 documents showing the judgment rendered in the suits and hence the production of those documents in the first appellate stage has no much relevance, but can only be considered as unwarranted. 11. Yet another argument was also advanced that Ext.A3 gift is not attested by two witnesses. But the document says otherwise. It is seen attested by two witnesses. The first witness is an independent person. The second witness is the scribe and their names were included by giving witness Nos.1 and 2. That itself shows that the scribe was acting both as attesting witness and as the scribe to the document and hence the said argument cannot be sustained. No other substantial question of law brought to the notice of this court. Hence the appeal fails, dismissed, but without costs. This appeal is dismissed. No costs. ## **Sd/-** SV ## **P.SOMARAJAN** **JUDGE**