R.S.A. No. 372 of 1999 1 IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH R.S.A.No. 372 of 1999 Date of decision:16th September, 2009 Kulbir Singh and others ......Appellants Versus Harbans Kaur and another ......Respondents BEFORE: HON’BLE MR. JUSTICE RAJIVE BHALLA Present: Mr. S.D.Sharma, Senior Advocate with Ms. Bindu Goel, Advocate for the appellants. Mr. Ashish Gupta, Advocate for the respondents. Rajive Bhalla, J. The appellants challenge judgments and decrees dated 9.08.1994 and 7.12.1998, passed by the Additional Senior Sub Judge, Fatehgarh Sahib and the Additional District Judge, Fatehgarh Sahib decreeing the suit filed by the respondents and dismissing their appeal. The plaintiff-respondents filed a suit for possession of land measuring 28 bighas 12 biswas situated in village Chanarthal Kalan, Tehsil.Sirhind, District Patiala, and for mesne profits from December 1985, onwards by pleading that the suit R.S.A. No. 372 of 1999 2 land was allotted to Chhabil Dass, respondent no. 2 by way of an allotment parchi, dated 31.05.1979, issued by the Tehsildar Sales, Patiala. Chhabil Dass was put into possession of the suit land on 1.07.1983 vide rupport no. 481 of even date. The Tehsildar Sales, Fatehgarh Sahib, executed a conveyance deed dated 20.04.1988, conferring proprietary rights. Chhabil Dass, thereafter, sold the land to Harbans Kaur, respondent no. 1. The appellants forcibly dispossessed respondent no. 1 from the suit land and have begun asserting their title. In response, the appellants filed a written statement denying the averments in the plaint. The appellants pleaded that the suit land along with other land situated in village Chanarthal Kalan was allotted to Kuldip Singh and Pardip Singh on 14.07.1971 and possession was delivered to Pardip Singh and Kuldeep Singh. They executed an agreement to sell the land on 18.09.1971, in favour of Chet Singh son of Budh Singh for Rs. 25,000/-. As Chet Singh passed away in December 1971, his rights under the agreement devolved upon Jodh Singh and Janak Singh who vide a written agreement dated 26.05.1972, transferred their rights to Pala Singh, Bhajan Singh and Kulbir Singh. As Kuldip Singh and Pardip Singh refused to execute a sale deed, Bhajan Singh, Kulbir Singh and Pala Singh filed a suit for specific performance which was decreed, by the then Sub Judge, Ist Class, Bassi, on 28.04.1977. In execution of the decree, a sale deed dated 19.07.1997, was executed in favour of the appellants. On the basis of these facts, the appellants prayed R.S.A. No. 372 of 1999 3 that as they are owners in possession of the suit land, the suit should be dismissed. After considering the pleadings, the trial court framed the following issues:- “1. Whether plaintiff no. 1 is owner of the suit land?OPP 2. Whether plaintiff no. 1 is entitled to recover possession of the suit land?OPP 3. Whether plaintiff no. 1 is entitled to recover mesne profit. If so how much?OPP 4. Whether suit is not maintainable?OPD 5. Relief.” After considering the pleadings, the evidence adduced and the arguments addressed, the trial court decreed the suit by holding that the sanad, executed by the Rehabilitation department in favour Chhabil Dass, the respondents vendor was legal and valid whereas the sanad, allegedly executed in favour of Pardip Singh and Kuldip Singh was fraudulent. It was therefore, held that the sale deed executed by Pardip Singh and Kuldip Singh in favour of the appellants was null and void. The plea that the appellants are bonafide purchasers for valuable consideration without any notice of any defect in the title of their vendor was rejected. Aggrieved by the aforementioned judgment and decree, the appellants filed an appeal. Vide judgment and R.S.A. No. 372 of 1999 4 decree dated 7.12.1998, the Additional District Judge, Fatehgarh Sahib, dismissed the appeal and affirmed the findings recorded by the trial court. Counsel for the appellants contends that Kuldip Singh and Pardip Singh were allottees from the Rehabiliation department. The appellants filed a suit for specific performance against Kuldip Singh and Pardip Singh which was decreed on 28.04.1977. In execution of this decree a sale deed was executed in their favour and therefore, even if the allotment, sanad in favour of their vendors, is void, the appellants are bonafide purchasers for valuable consideration. It is argued that before executing the agreement to sell the appellants verified the sanad, Ex.D-38 and the Jamabandi which records their vendors as allottees of the suit land. The courts below therefore, erred in rejecting the appellants plea that they are bonafide purchasers of the suit land. It is further argued that the appellants filed a suit for declaration of their ownership on the basis of the allotment made to Pardip Singh and Kuldip Singh. In response to the suit, the State did not deny the correctness of the allotment or the sale deed. Though, the suit was eventually dismissed, the admission made by the State of Punjab, about the validity of the allotment should have been accepted. Counsel for the respondents, on the other hand, submits that the sanad Ex.D-38 has been held to be fraudulent. Section 41 of the Transfer of Property Act, does not protect a perpetuator of a fraud or its beneficiary. As both the trial court R.S.A. No. 372 of 1999 5 and the first appellate court, have returned concurrent findings that the sanad Ex.D-38 is fradulent, the plea of transfer from an ostensible owner was rightly rejected. It is also submitted that the written statement, Ex. D-5, admitting the correctness of the allotment or sale deed which was filed by the State in a suit was dismissed is irrelevant. I have heard counsel for the parties, perused the impugned judgments and decrees and do not find any reason to hold that the courts below have committed any error as would raise a substantial question of law. As is apparent from the facts, both parties claim to be allottees from the rehabilitation department. The allotment in favour of the respondents vendor Chhabil Dass, has been held to be valid whereas the allotment in favour of the appellants vendors Pardip Singh and Kudeep Singh was found to be fraudulent and was therefore cancelled by the rehabilitation authorities. The appellants challenged the order of cancellation before the Chief Settlement Commissioner and the Financial Commissioner Revenue Punjab, but without success. In order to place the finding of fraud in its correct prospective, it would be appropriate to reproduce an extract from the trial court's judgment which reads as follows:- “The same very controversy was taken up by the Managing Officer, Chief Settlement Commissioner and then by the Financial Commissioner Revenue. The Financial R.S.A. No. 372 of 1999 6 Commissioner Revenue in his order copy Ex P-10 took up the petition filed by Piara Singh and Bhajan Singh against Pala Singh and the State against the order of the Chief Settlement Commissioner, Punjab Jallandhar dated 30.4.1979. It was categorically held by the Financial Commissioner, Revenue in his order copy Ex.P-10 that the land measuring 5 standard acre and 11 units had been allotted by the Rehabilitation department in favour of Pardeep Singh and Kuldip Singh in village Chanarthal Kalan. On further enquiry it transpired that the allotment was obtained by fraud due to the machinations of one Jodh Singh Patwari who got an agreement executed for the sale of the land in dispute in favour of his father Chet Singh. Then, Chet Singh and his son Jodh Singh, the Patwari remained in occupation of the land but the proprietory rights of the land were never acquired by the allottees. The subsequent agreement for the sale of the land was entered into by Chet Singh with Piara Singh and Bhajan Singh but it was contested in the civil court. The Rehabilitation department was not impleaded as party in those proceedings and the petitioners Piara Singh and Bhajan Singh filed an appeal R.S.A. No. 372 of 1999 7 against the order of Managing Officer dated 30.11.1978, before the Settlement Commissioner, Punjab Jallandhar who partly accepted it and directed that in case the petitioners were bonafide vendees, they should be allowed to purchase this land under the policy of the State Government. Then Pala Singh and Jaimal Singh went up in appeal before the Chief Settlement Commissioner, Punjab, Jallandhar who held that the allotment of the land and its subsequent transactions were collusive and that the Rehabilitation department was not a party in the civil court and therefore, it was done by the petitioners Piara Singh and Bhajan Singh in order to cover up the fraud. Ld. Financial Commissioner categorically held that the land in question was originally allotted to Kuldip Singh and Pardeep Singh and Piara Singh and Bhajan Singh have no connection with it. The whole mischief was played by Jodh Singh Patwari and therefore, Bhajan Singh and Piara Singh absolutely no locus-standi to purchase the land from a person who himself had no right in the land in dispute.” It is therefore, apparent that Jodh Singh Patwari R.S.A. No. 372 of 1999 8 manipulated a fraudulent allotment in favour of Pardip Singh and Kuldip Singh who then executed an agreement in favour of his father Chet Singh. After the death of his father, Jodh Singh Patwari and Janak Singh transferred their rights to Bhajan Singh and Kulbir Singh by executing an agreement dated 26.05.1972. Fraud is an anathema to justice, equity and good conscience. The equitable principles incorporated in Section 41 of the Transfer of Property Act, that entitles a vendee to claim protection on the plea that his vendor is an ostensible owner do not apply where the vendors has obtained property by perpetuating a fraud. As the foundation of the appellants plea is based upon a fraud, the appellants cannot be heard to urge that as their vendors are ostensible owners and they are entitled to protection as bonafide purchaser. In view of what has been stated hereinabove, the appeal is dismissed with no order as to costs. [RAJIVE BHALLA] JUDGE 16th September, 2009 Shivani Kaushik