T.T. Varkey and Fr. Varghese v Lily and M.P. KuriaKose

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT** ## **THE HONOURABLE MR.JUSTICE P.SOMARAJAN** **THURSDAY,THE 6TH DAY OF DECEMBER 2018/15TH AGRAHAYANA, 1940** ## **RSA.No.585 of 2009 C** **AGAINST THE JUDGMENT AND DECREE DATED 31.1.2009 IN AS NO.205/2006 OF ADDITIONAL DISTRICT COURT, NORTH PARAVUR** **AGAINST THE JUDGMENT AND DECREE DATED 31.3.2005 IN OS NO.145/2001 OF THE PRINCIPAL SUB COURT, NORTH PARAVUR** ## **APPELLANTS/APPELLANTS/DEFENDANTS:** **1 T.T.VARKEY,S/O.THARU, THAPARAMBIL HOUSE, PEECHANICADU KARA, ANGAMALY VILLAGE, ALUVA TALUK. 2 FR.VARGHESE, S/O.T.T.VARKEY THAPARAMBIL HOUSE, PEECHANICADU KARA, ANGAMALY VILLAGE, ALUVA TALUK.** **BY ADV. DR.GEORGE ABRAHAM** ## **RESPONDENTS/RESPONDENTS/PLAINTIFFS:** |**1**|**LILY, S/O.M.P.KURIAKOSE,**| |---|---| ||**MARACHERY HOUSE, CHELATTU,**| ||**PINDIMANA P.O., KOTHAMANGALAM.**| |**2**|**M.P.KURIAKOSE, S/O.PATHROSE,**| ||**MARACHERY HOUSE, CHELATTU,**| ||**PINDIMANA P.O., KOTHAMANGALAM.**| ||**BY ADVS.SRI.K.JAYAKUMAR (SR.)**| ||**SRI.P.B.KRISHNAN**| ||**SMT.GEETHA P.MENON**| ||**SRI.NEELAKANDAN P.M.**| **THIS REGULAR SECOND APPEAL HAVING BEEN FINALLY HEARD ON 06.12.2018, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:** R.S.A.No.585 of 2009 :: 2 :: ## **JUDGMENT** Aggrieved by the concurrent findings and the judgment and decree of both the trial court (Sub Court, North Paravur) in O.S.No.145 of 2001, dated 31.3.2005, and the first appellate court (Additional District Judge, North Paravur) in A.S.No.205 of 2006, dated 31.1.2009, the defendants came up with this second appeal. 2. The suit was filed for declaration of title over the plaint schedule property having an extent of 40 cents + 2 cents, scheduled in the plaint as A and B respectively. A schedule property having an extent of 40 cents is the subject matter of Ext.A1 settlement deed alleged to have been executed by the first defendant in favour of his daughter, first plaintiff, and her fiance, second plaintiff, just before the solemnization of their marriage. It was executed in furtherance of an earlier agreement executed by the first defendant R.S.A.No.585 of 2009 :: 3 :: in favour of the second plaintiff, exhibited as B3. Later on, the plaintiffs came to know about the suit in O.S.No.507 of 1990 instituted by the South Indian Bank Limited, Angamaly for recovery of the mortgage amount covered by a subsisting mortgage over the property. The decree in O.S.No.507 of 1990 was put in execution and the Bank, with the permission, bid the property in court auction. Later on it was given to defendant Nos.1 and 2 under Ext.A3 document, dated 17.10.2000. In the suit in O.S.No.507 of 1990, the plaintiffs were not made parties. According to the plaintiffs, the decree as well as the court auction and the subsequent sale are not binding upon them as they are not parties to the suit and the decree and its execution and sought for declaration of their title over the plaint schedule property and also for a declaration that Ext.A3 document is not binding on them or their right, title and interest over the plaint schedule property. R.S.A.No.585 of 2009 :: 4 :: 3. The defendants in turn contested the suit claiming that Ext.A1 gift deed was executed in furtherance of an earlier agreement, exhibited as B3, by which the first defendant agreed to pay an amount of `35,000/- by way of dowry to the second plaintiff, the fiance of the first plaintiff. Later on, Ext.A1 gift deed was executed in respect of A schedule property in favour of both the plaintiffs. There was a subsisting mortgage over the property with South Indian Bank, Angamaly as on the date of execution of Ext.A1 gift deed and as such whatever interest given under the document would be subject to the liability of the mortgage over the property. That liability was taken up in O.S.No.507 of 1990 by the mortgagee Bank and a decree was passed. Later on, the suit property was put in court auction and the Bank bid the property with permission and thereby, the right, title and interest over the property existed in favour of the plaintiffs ceased to an end. It is also contended that the plaintiffs are bound by the abovesaid decree and the court sale. It is from R.S.A.No.585 of 2009 :: 5 :: the Bank, the defendants purchased the property for valid consideration and thereby obtained right, title and interest over the property. Inter alia another contention was also raised stating that Ext.B3 being the one opposed to public policy stood hit by Section 23 of the Contract Act and hence consideration to Ext.A1 document would fail and no right, title and interest can be claimed by the plaintiffs over the property based on the said document. 4. Both the trial court and the first appellate court decreed the suit declaring the title of plaintiffs over the property and granted recovery of possession. This appeal was taken up aggrieved by the abovesaid concurrent finding rendered in the decree and judgment of both the trial court as well as the first appellate court. 5. The question came up for consideration is, whether a transferee for valid consideration would bind by a decree in which he is not a party, R.S.A.No.585 of 2009 :: 6 :: pertaining to a mortgage in a subsequent suit after transfer and what would be the legal effect of the decree and court sale in execution. 6. Going by Ext.B3, it is clear that it was executed prior to the solemnization of the marriage in between the first and second plaintiffs by which the father of the first plaintiff had agreed to contribute an amount of `35,000/- by way of dowry to the second plaintiff. Needless to say that the agreement itself would stand as hit by Section 23 of the Contract Act being the one opposed to public policy. 7. But at the same time, going by Ext.A1 document, though a case was advanced that it was executed in furtherance of Ext.B3 agreement, there is nothing in the document in support of the said argument. There is not even any recital or mention regarding the earlier agreement or execution of the said document in furtherance of the earlier agreement. Ext.A1 is a settlement deed and the R.S.A.No.585 of 2009 :: 7 :: contents also satisfy the nature of the document as a settlement deed, as defined under S.2(b) of the Specific Relief Act, executed by the father in favour of his daughter and her fiance. 8. The expression “settlement” is not defined anywhere in the Transfer of Property Act, may be due to the reason that it would intake an agreement disposing of the property or agreeing to dispose of the property, which reads as follows: “2(b) “settlement” means an instrument other than a will or codicil as defined by the Indian Succession Act, 1925 (39 of 1925) whereby the destination or devolution of successive interests movable or immovable property is disposed of or is agreed to be disposed of;” 9. The expression “settlement” is also defined in the Stamp Act, but it is intended only for the purpose of computation of stamp duty by bringing certain category of documents within the caption “settlement”. In the instant case, the father had executed the document in favour of his daughter R.S.A.No.585 of 2009 :: 8 :: and her fiance and the consideration was stated in the document as love and affection. But the fact that it was executed by the father to one of his legal heirs, daughter, and her fiance just before her marriage, in consideration of the estate to be given to her by way of her share would satisfy the requirement to bring up the document within the definition “settlement” as defined under the Specific Relief Act. There is no dispute with respect to the factum of execution and registration of Ext.A1 document. When the document is registered and duly entered in the records pertaining to the registration, it amounts to notice to beneficiary under the document and when there is notice of gift under a settlement deed it amounts to acceptance. 10. Even going by the definition given under Section 2(b) of the Specific Relief Act, if any gift was given over the immovable property or movable property, when there is a subsisting liability over the property, the donee cannot ## R.S.A.No.585 of 2009 :: 9 :: exclude or reject the liability over the property, but can only accept the document in toto or to reject the same in toto. He cannot accept one part which is beneficial to his interest and to reject the other. In short, the liability over the property would stand and continue and the plaintiffs cannot avoid the liability attached to the said property. 11. It is for that liability the suit in O.S.No.507 of 1990 was instituted by the Bank. Unfortunately, the persons holding right, title and interest over the property, as on the date of suit are the plaintiffs herein. They can be held liable or answerable to the liability only when they were made parties to the suit. None of the plaintiffs were made parties to the suit though the title was diverted even prior to the institution of the suit under Ext.A1 settlement deed. 12. The defendants relied on the decision R.S.A.No.585 of 2009 :: 10 :: rendered by this Court in _**Francis @ Porinju v. Navodaya Kuries & Loans (P) Ltd. and Others (2010**_ _**KHC 726)**_ that the court sale would divert all the right, title and interest of the defendants over the property. There cannot be any quarrel on the legal position. But what would stand as diverted/ vested with the purchaser under court sale is the right, title and interest of the defendants/ judgment debtors who are parties to the decree and none else. The plaintiffs are not parties to the suit or the decree and hence, the entire proceedings in O.S.No.507 of 1990 and the execution proceedings inclusive of court sale is not binding on any of the plaintiffs herein. 13. Inter alia, another contention was raised that the property was brought into sale after completing all the formalities under Order XXI Rule 66 of CPC by giving public notice and it would be a notice to all interested persons. The statutory requirement to be complied with so as to complete a court sale itself is not amounts to R.S.A.No.585 of 2009 **==> picture [28 x 9] intentionally omitted <==** notice to a real owner of the property. Of course, that question requires consideration in relation to constructive notice as embedded under Section 3 of the Transfer of Property Act to the expression 'when a person is said to have notice'. Hence, appeal lacks in merits, deserves only dismissal, but without costs. The Second Appeal is dismissed. No order as to costs. ## **SD/** ## **P.SOMARAJAN** **JUDGE** ahz/