IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE P.BHAVADASAN TUESDAY, THE 18TH JANUARY 2011 / 28TH POUSHA 1932 SA.No. 126 of 1995(F) ------------------- AS.NO. 198/88 OF DISTRICT COURT, THIRUVANANTHAPURAM O.S. NO. 1146/1973 OF PRINCIPAL MUNSIFF COURT, TRIVANDRUM ............................... APPELLANT :- RESPONDENT NO.6 / DEFENDANT NO. 6: -------------------------------------------------------------------------------- *THANKAMMA, MUTTANVILAKATHU VEEDU, KURUMANDALCHERRY, PARAVOOR VILLAGE (SOUTH PARAVOOR) (DIED LRS IMPLEADED) * ADDL APPELLANTS IMPLEADED *2. DR. K. BALACHANDRAN, KARUNALAYAM MANGALAI BHAVAN, AYIKKARA KONAM, PUNALUR MURI, PUNALUR VILLAGE, NOW RESIDING AT 39/3913 A, LEELA VILAS, AZAD ROAD, KOCHI – 17. *3. DR. LEELA BALACHANDRAN, -DO- -DO- * ADDITIONAL APPELLANTS 2 AND 3 ARE IMPLEADED AS REPRESENTATIVES OF THE DECEASED SOLE APPELLANT AS PER ORDER DATED 19/3/01 ON CMP NO. 601/2001. BY ADVS. SRI.G.UNNIKRISHNAN SRI. P.V. RAMESH SHANKER RESPONDENTS : APPELLANT AND RESPONDENTS 1 TO 5 / PLAINTIFF AND --------------------------------------------------------------------------------- DEFENDANTS 1T0 5 : ------------------------------ 1. VIVEKANANDAN, MANGALATHU VEEDU, KURAKANNI DESOM, VARKALA VILLAGE, CHIRAYINKIL TALUK. ****2. KUNJI, VILAYIL VEEDU, MUNDAYIL, VARKALA DESOM AND VILLAGE (DIED) 3. NALINI, CHUNDAVILA KOCHU VEEDU, HAVING ALSO VILAYIL VEEDU OF DO. DO. ...2/- SA.No. 126 of 1995(F) -2- 4. LEELA, MELA KUNNIL VEEDU, AYANTHI, VARKALA. 5. BAHULEYAN, VILAYIL VEEDU, MUNDAYIL, VARKALA. 6. AMBIKA KUMARI, PUTHUKARI VEEDU, VARAMBATHITTAYIL, CHIRAYINKIL. **ADDITIONAL R7 TO R10 IMPLEADED **7. V. VIJAYAPRAKSAN, V.C. COTTAGE, CHERAKUNNAM, VARKALA P.O. **8. B. RADHAMMA, R.K. MANDIRAM, NETTAYAM P.O., AMBALAMKUNNU, KOTTARAKKARA. (***DIED LRS IMPLEADED) **9. B. ROHINI BAI, LITTLE FLOUR NOSE NEST (CHAVADI), JANARDHANAPURAM, VARKALA P.O. **10. B. REMA DEVI, BABYSADANAM, NJAKKAD, VADASSERIKONAM P.O., VARKALA. **ADDITIONAL R7, R9 & R10 ARE IMPLEADED AS THE LR'S OF DECEASED R1 VIDE ORDER DATED 3/11/09 IN I.A NO.927/08. ***ADDITIONAL R11 & R12 IMPLEADED ***11. PRADEEP KUMAR K.R. (TO BE IMPLEADED) R.K. MANDIRAM, NETTAYAM P.O., AMBALAKUNNU, KOTTARAKARA. ***12. PREETHA K.R., DO. DO. (TO BE IMPLEADED) ***ADDL. R11 & 12 ARE IMPLEADED AS THE LR'S OF DECEASED ADDL. R8 (WHO WAS SOUGHT TO BE IMPLEADED) VIDE ORDER DATED 3.11.09 IN I.A. 1984/09. **ADDITIONAL R13 & R14 IMPLEADED ****13. ANITHA S., VILAYIL VEEDU, MUNDAYIL, VARKALA P.O., THIRUVANANTHAPURAM. ...3/- SA.No. 126 of 1995(F) -3- ****14. GEETHA S., VILAYIL VEEDU, MUNDAYIL, VARKALA P.O., THIRUVANANTHAPURAM. ****ADDL. R13 & R14 ARE IMPLEADED AS LR'S OF THE SECOND RESPONDENT VIDE ORDER DATED 3.6.10 IN IA 1205/10. **** R3 TO 6 ARE RECORDED AS LRS OF DECEASED R2 VIDE ORDER DATED 3.6.10 IN MEMO DATED 29/5/10 BEARING CF 2790/10. R1 BY ADV. SRI M.V. BOSE R2 TO R6 BY ADVS. SRI. R. RAJASEKHARAN PILLAI SRI. R. SREEDHARAN NAIR THIS SECOND APPEAL HAVING BEEN FINALLY HEARD ON 03/01/2011, THE COURT ON 18/01/2011 DELIVERED THE FOLLOWING: P. BHAVADASAN, J. - - - - - - - - - - - - - - - - - - - - - - - - - - - S.A. No. 126 of 1995 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Dated this the 18th day of January, 2011. JUDGMENT The sixth defendant in O.S.1146 of 1973 before the Munsiff's Court, Thiruvananthapuram, who suffered a decree at the hands of the lower appellate court has come up in appeal before this court. The parties and facts are hereinafter referred to as they are available before the trial court. 2. The plaint schedule property, which has an extent of 12 cents, belonged to Neelakantan Vaidyan, who obtained it under Ext.B1 dated 31.10.1950. He executed Ext.A2 mortgage deed dated 15.10.1957 in favour of one Sathi Devi. Subhadra, the wife of Neelakantan Vaidyan, took assignment of the mortgagee's rights as per Ext.A12 dated 17.11.1958. It was contended on behalf of the sixth defendant that Neelakantan Vaidyan on 5.3.1960 had agreed to sell the S.A.126/1995. 2 property to the sixth defendant for a total consideration of Rs.3,000/-. As part of the sale consideration Neelakantan Vaidyan received Rs.1,800/- and put the sixth defendant in possession of the property and the prior deeds were also handed over to her. It is pointed out that the sixth defendant had rented out the building to the seventh defendant and eighth defendant. Sixth defendant is the sister of Neelakantan Vaidyan's wife, Subhadra. When Neelakantan Vaidyan was in hospital, he received a sum of Rs.500/- from the sixth defendant as part of the sale consideration. Neelakantan Vaidyan died on 10.1.1962 before actually executing the sale deed in favour of the sixth defendant. Sixth defendant would assert that Subhadra, who succeeded to the property executed Ext.B6 sale deed dated 25.9.1965 and thus she became the absolute owner in possession of the property. 3. Neelakantan Vaidyan had two cousin brothers, Velayudhan Vaidyan and Ramakrishnan. Vivekanandan, the plaintiff is the son of Velayudhan Vaidyan. According to the S.A.126/1995. 3 plaintiff, Neelakantan Vaidyan had executed Ext.A1 Will dated 10.6.1957, whereby the plaint schedule property was bequeathed to Velayudhan Vaidyan and Ramakrishnan. Velayudhan Vaidyan had assigned his share over the suit property by Ext.A8 dated 23.3.1964 in favour of Vivekanandan, the plaintiff. Defendants 1 to 5 are the legal heirs of Ramakrishnan, who had 2/5 share over the property. Claiming 3/5 shares, the suit was laid. 4. The trial court on the basis of the pleadings raised necessary issues for consideration. The evidence consists of the testimony of P.Ws. 1 to 3 and documents marked as Exts.A1 to A12 from the side of the plaintiff. Defendants had D.Ws.1 to 4 examined and Exts.B1 to B10 marked. Initially the trial court had dismissed the suit. The matter was carried in appeal by the plaintiff as A.S.50 of 1977 and the lower appellate court allowed the appeal and remanded the case for decision on issue Nos. 4, 5 and 6, which according to the lower appellate court had not been decided by the trial court earlier. That order was challenged S.A.126/1995. 4 in C.M.A. 17 of 1980 and this court clarified certain aspects and confirmed the remand order. 5. After the remand order by the lower appellate court, which was confirmed by this court, the trial court came to the conclusion that the plea of ademption put forward by the sixth defendant is acceptable and accordingly dismissed the suit. The plaintiff carried the matter in appeal as A.S. 198 of 1988. The lower appellate court chose to take a different view from that of the trial court and did not accept the plea of ademption. The lower appellate court was of the opinion that since the sale deed had not been executed during the lifetime of Neelakantan Vaidyan, she had no rights over the suit property. An observation was also made to the effect that the only remedy, if at all any, was to seek specific performance of the contract and having not done so, she would have to suffer the consequences and accordingly the appeal was allowed and the suit was decreed. Thus this appeal. S.A.126/1995. 5 6. During the pendency of the appeal before this court, the appellant died and her legal heirs have been brought on the party array. Second respondent also died and her legal heirs were already on the party array. 7. Notice has been issued on the following substantial questions of law: “i) Is the legacy in Ext.A1 Will in respect of the suit property amended by the subsequent transactions of he testator regarding the property as contended by the sixth defendant? ii) Is not the finding of the court below that after 4.3.1963, no obligation to execute a sale deed in terms of the agreement for sale by Neelakantan Vaidyan in favour of the sixth defendant was alive contrary to law? iii) Is the plaintiff entitled to a decree for possession of 3/5 share of the suit property even if Ext.A1 Will is valid and the legacy was not adeemed? iv) What is the nature of the estate that devolved on Velayudhan and Ramakrishnan as per Ext.A1 Will? Is not the agreement for sale by the testator in favour of the sixth defendant binding S.A.126/1995. 6 on Velayudhan and Ramakrishnan? Are they not bound to perform this part of the contract even if Ext.B6 sale deed by Subhadra, the heir at law of the testator incompetent? v) If the agreement for sale is binding on the legatees of the suit property, on what date does the right to sue the legatees for specific performance of the agreement accrue? Is not the sixth defendant entitled to resist the plaintiff's claim of title and also claim for possession on the basis of the agreement to sell, the existence of which has been found? vi) Assuming that the right of the sixth defendant to sue for specific performance of the agreement does not subsist, is the plaintiff entitled to a decree for possession of his share ignoring the charge in favour of the sixth defendant on the suit property under Section 55 (6)(b) of the Transfer of Property Act for the consideration paid by her?” 8. Learned counsel appearing for the appellant very strenuously argued that the lower appellate court was incorrect in its approach to the issues involved in the suit S.A.126/1995. 7 and has resulted in miscarriage of justice. Learned counsel contended that the trial court was justified in coming to the conclusion that there was ademption of legacy and if that be so, the plaintiff could not claim any benefit on the basis of the Will said to have been executed by Neelakantan Vaidyan in favour of Velayudhan Vaidyan and Ramakrishnan. According to the learned counsel, the sixth defendant in the suit was put in possession of the suit property in pursuance to the oral agreement for sale. The total sale consideration was Rs.3,000/- and it has come out in evidence that Neelakantan Vaidyan had received Rs.2,300/-. Learned counsel drew the attention of this court to the fact that this has been accepted by this court in C.M.A. 17 of 980 and that is not open to review. This court while confirming the remand order had observed that the Will in question, namely, Ext.A1 dated 10.6.1957, on which much reliance was placed by the plaintiff, contains the signature of Neelakantan Vaidyan and it has been duly attested. However, this court in the C.M.A. observed that there has to S.A.126/1995. 8 be a finding regarding the fact that Neelakantan Vaidyan was aware of the contents of the Will. Learned counsel for the appellant pointed out that it is a clear case of ademption as per Section 152 of the Indian Succession Act and the lower appellate court was not justified in coming to the conclusion that an agreement for sale does not confer any right on the proposed vendee. Accordingly, it is contended that the judgment and decree of the lower appellate court are unsustainable both on facts and in law. 9. Per contra, learned counsel appearing for the contesting respondents pointed out that the lower appellate court has made the correct approach and has come to the right conclusion. It could not be said that there has been an ademption of the legacy as contended by the learned counsel for the appellant and even assuming that the sixth defendant had any claim over the suit property, that was only on the basis of an oral agreement for sale. That does not confer any right or interest in the property to the sixth defendant. The property remained in specie and consequent S.A.126/1995. 9 on the death of Neelakantan Vaidyan, his Will came into force and the legacy fell on Velayudhan Vaidyan and Ramakrishnan. If at all the sixth defendant had to succeed, she had to sue for specific performance against the legatees under the Will and having not done so, she gets no rights over the suit property. The lower appellate court was therefore justified in decreeing the suit. 10. This court while confirming the remand order in C.M.A. 17 of 1980 had confirmed two findings, which are, i) that the Will contains the signature of Neelakantan Vaidyan and also that it was duly attested and (ii) that the claim of the sixth defendant that there was an agreement for sale and a sum of Rs.1,800/- and another sum of Rs.500/- had infact been received by Neelakantan Vaidyan and the sixth defendant had been put in possession of the suit property. 11. Reliance is placed on Section 152 of the Indian Succession Act, which reads as follows: S.A.126/1995. 10 “152. Ademption explained.- If any thing which has been specifically bequeathed does not belong to the testator at the time of his death, or has been converted into property of a different kind, the legacy is adeemed; that is, it cannot take effect, by reason of the subject-matter having been withdrawn from the operation of the Will.” 12. The contention now taken before this court by the appellant that by virtue of the agreement for sale in favour of the sixth defendant and having put her in possession of the same, there is ademption of the legacy as contemplated under Section 152. 13. Ademption is defined to be a failure of a specific bequest or devise through its subject not being in existence in specie at the time of the testator's death as a part of his estate, or in other words, the subject matter of bequest ceases to exist as on the date of the death of the testator. Consequently the bequest fails. It is well settled that the legacy has to be specific to fall within ademption. S.A.126/1995. 11 14. English Law recognizes two types of ownership, legal and equitable. In English Law it is well settled that the agreement for sale is sufficient to cause ademption. Till the introduction of Section 54 of the Transfer of Property Act, the position in India was almost the same. Section 54 of the TP Act reads as follows: “54. “Sale” defined.- “Sale” is a transfer of ownership in exchange for a price paid or promised or part-paid and part-promised. Sale how made.- Such transfer, in the case of tangible immovable 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 immovable property of a value less than one hundred rupees, such transfer may be made either by a registered instrument or by delivery of the property. Delivery of tangible immovable property takes place when the seller places the buyer, or such person as he directs, in possession of the property. S.A.126/1995. 12 Contract for sale.- 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.” on A reading of the above provision will make it clear that an agreement for sale confers no interest in the immovable property the proposed vendee. Doubts have been expressed as to whether subsequent to the introduction of Section 54 of the TP Act the principle that an agreement for sale will be sufficient to constitute ademption in India. 15. Reliance was placed by the learned counsel for the appellant on the decision reported in S.Gopalaratnam v. Authorised Officer, Tanjavur (AIR 1971 Madras 400). It is true that in the said decision almost an identical situation came up for consideration and the court held that an agreement for sale is sufficient to constitute ademption. Learned counsel for the appellant S.A.126/1995. 13 also relied on a passage from Law of Wills by Mantha Ramamurti for the proposition that every devise of immovable property is specific and falls within the scope of Section 54 the TP Act. Reliance was placed on a passage from Law of Succession by P.M. Bakshi 1997 Edn, where the question as to where ademption occures was considered. It is seen mentioned as follows: “specific bequest is adeemed by sale or contract for same of the subject matter by the testator.” 16. Reliance was placed on a passage from Law of Succession by Paras Diwan, wherein it was observed as follows: “It is a general rule applicable to specific legacies that its subject matter must at testator's death remain in specie, otherwise the specific legatee will not get the legacy. Thus a specific legacy of land or house stands adeemed if the land had been sold, though the purchase money may be impressed with a trust for reinvestment in land or house. However,where the disposition of S.A.126/1995. 14 the subject matter of specific legacy is not absolute, such as when it is only pledged or mortgaged, the testator's right of redemption passes to the legatee.” 17. Reliance was also placed on the decision reported in Bhaskaran Pillai v. Narayanan Aaan (1965 KLT 1289), wherein it was observed as follows: “It was contended by learned counsel that the all important consideration should be the intention of the testator, that it should be ascertained in the background that a 'Court of construction shall try to avoid intestacy'. The short answer to the contention is that ademption of a legacy does not depend on the intention of the testator, but is a conclusion of law from certain events or conduct. In Humphreys v. Humphreys Lord Thurlow, Lord Chancellor, was satisfied “that the only rule to be adhered to was to see whether the subject of the specific bequest remained in specie at the time of the testator's death; for, if it did not, then there must be an end of the bequest; and that the idea of discussing what were the particular motives and intention of the testator in each case, in destroying the S.A.126/1995. 15 subject of the bequest, would be productive of endless uncertainty and confusion.” 18. It will be useful to refer to a passage from Law of Wills by Gopalakrishnan 4th Edn. in page 752 Note 5 it states as follows: “5. Ademption by sale. A specific devise of land is adeemed if the land is later on sold away by the testator, even where he reinvests the sale- proceeds in trust for purchase of other land. Even a contract for sale, not completed before testator's death, will result in ademption. But till the property is completely sold, the specific legatee shall have a right to enjoy it and receive the rents and profits. If there is neither a sale nor an enforceable contract for sale, it will not cause ademption. Where the testator sold away the property specifically devised, and on the next day got it reconveyed as mortgage for securing the part of the purchase-money, the legatee cannot claim the money charged on the property.” 19. It has been consistently held that an agreement for sale as such does not confer any right on the proposed transferee. See the decisions reported in S.A.126/1995. 16 Narayana Pillai Chandrasekharan Nair v. Kunju Amma Thankamma (AIR 1990 Kerala 177) (Mian) Pir Bux v. Mohamed Tahar (AIR 1934 PC 235). However, it has been held in several decisions that an agreement for sale does create an obligation on the vendor. It creates an obligation arising out of a contract and is annexed to the immovable property. It does not amount to an interest in the property and it has been held that such an obligation can be enforced against the transferee with notice of the contract or a gratuitous transferee affected thereby. In this connection it will be profitable to refer to a passage from the Transfer of Property Act by Mulla 10th Edn.. page 267 It reads as follows: “The right referred to in the first paragraph of the section has come into existence before the transfer, and presupposes ownership of property. The right referred to in the second paragraph has also come into existence before the transfer, but does not presuppose ownership of property. it is a purely personal right arising out of contract, and the person who has the right need not be the owner of any property at all. But S.A.126/1995. 17 the right though personal, must be annexed to the ownership of immovable property. The illustration shows that the purchaser under a contract of sale of land has be right defined in the second paragraph. That right in English law is an equitable estate in land. But, as explained in s.5, the Indian legislature has eschewed the doctrine of equitable ownership. According to s.3 of the Indian Trusts Act 1882, what would be in English law the equitable estate of the cestui que trust is the benefit of an obligation annexed to the ownership of property. Section 54 of the TP Act expressly states that a contract of sale of immovable property does not, of itself, create an interest in or charge upon such property, but it creates an obligation, the fiduciary character of which is recognized in s 3 of the Specific Relief Act 1963, and in s 91 of the Indian Trusts Act 1882. A contract for sale, therefore, does not create an interest in land, but creates a personal obligation of a fiduciary character which can be enforced by a suit for specific performance not only against the vendor, but also against a volunteer and a purchaser for consideration with notice. A contract of sale (as provided by last two S.A.126/1995. 18 paragraphs of s 40) creates an obligation annexed to ownership of property. A reading of ss 40 and 54 of the TP Act and s 91 of the Indian Trusts Act, 1882 makes it clear that the subsequent transferee with notice stands in a fiduciary capacity and holds the property in trust to the prior agreement holder, but the prior agreement holder cannot automatically become the owner by seeking declaratory relief, and has to necessarily file a suit for specific performance impleading both the vendor and the subsequent transferee.” In the decision reported in Narayana Pillai Chandrasekharan Nair v. Kunju Amma Thankamma (AIR 1990 Kerala 177), it was held as follows: “It is clear from the ultimate paragraphs of Ss.54 and 40, T.P.Act that a contract for sale of immovable property though does not, of itself, create any interest in or charge on such property, it creates an obligation arising out of the contract and annexed to immovable property, not amounting to an interest in the property. Such S.A.126/1995. 19 obligation could be enforced against a transferee with notice of the contract or a gratuitous transferee affected thereby. the equitable ownership in property recognised by equity in England is thus translated into Indian law as an obligation annexed to the ownership of property, but an obligation, which may be enforced against a transferee with notice or a gratuitous transferee. The concept and creation of duality of ownership, legal and equitable, on the execution of an agreement to convey immovable property, as understood in England is alien to Indian law which recognizes one owner, that is, the real owner. But many of the principles of English Equity have taken statutory form in India and have been incorporated in occasional provisions of the various Indian statutes like Trust Act, Specific Relief Act, T.P.Act etc.” 20. In the decision reported in Devarapalli Venkara Narasimharao v. Pilla Ramayyamma (1987 (1) ALT 718), it was held as follows: S.A.126/1995. 20 “I respectfully agree with the above view and needs no reiteration. I am bound by the above ratio laid down by the Madras High Court. thus I hold that though the agreement for sale does not create any right, title or interest in the property under Section 54 of the Transfer of Property Act, but it creates an interest in the property by operation of 2nd paragraph of Section 40 of the Transfer of Property Act, and this right prevails by operation of Order 38 Rule 10 COC. Therefore, the rigour imposed under Section 64 of the Code does not prevail. The agreement of sale thereby is not void and the attachment before judgment does not prevail over the contract for sale.” 21. In the decision