IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED: 21.06.2010 C O R A M THE HONOURABLE MR.JUSTICE P.R.SHIVAKUMAR A.S.No.748 of 2002 and Cross Objection No.34/2003 1.Ponnusamy 2.Ramachandran @ Ramasamy 3.Avinasi Gounder ... Appellants/Plaintiffs Vs. K.K.Subramaniam ... Respondent/Defendants Appeal suit filed under Order XLI Rule 1 and Section 96 of the Civil Procedure Code as against the judgment and decree of the learned Additional District Judge (Fast Track Court II), Gobichettipalayam dated 19.09.2002 made in O.S.No.1 of 2001. For Appellants : Mr.R.T.Doraisamy For Respondents : Mr.T.Murugamanickam Cross Objection No.34 of 2003 K.K.Subramaniam .. Cross Objector/Respondent Vs. 1.Ponnusamy 2.Ramasamy @ Ramachandran 3.Avinasi Gounder .. Respondents/Appellants Cross Objection filed under Order XLI Rule 22 CPC as against the judgment and decree of the learned Additional District Judge (Fast Track Court II), Gobichettipalayam dated 19.09.2002 made in O.S.No.1 of 2001. For Cross Objector : Mr.T.Murugamanickam For Respondents : Mr.R.T.Doraisamy https://hcservices.ecourts.gov.in/hcservices/ J U D G M E N T The appeal and cross objection have been filed against the judgment and decree of the trial court, namely the court of the Additional District Judge (Fast Track Court No.2), Gobichettipalayam dated 19.09.2002 made in O.S.No.1 of 2001 on the file of the said court. The plaintiffs 1 to 3 in the original suit are the appellants in A.S.No.748 of 2002. The suit was filed for a declaration and consequential injunction. The suit was partly decreed granting the relief of injunction and declining to grant the relief of declaration. As against the dismissal of the suit regarding the relief of declaration, the present appeal has been filed. As against that part of the decree granting the relief of injunction, the defendant has preferred the cross objection No.34 of 2003. 2. The case of the appellants as per the contents of the plaint filed by them as plaintiffs, in brief, can be stated thus:- The appellants/plaintiffs are the absolute owners of the property described in plaint schedule, which is an undivided common half share of the land having an extent of 0.11.0 hectare comprised in old Survey No.144A and new Survey No.15/7 in Irugalur village, Gobichettiplayam Taluk. The entire extent of 0.11.0 hectare was the ancestral properties of the appellants/plaintiffs. They wanted to construct a rice mill over the said property and run it with the help of the respondent/defendant, a close relative of the third appellant/third plaintiff. The respondent/defendant demanded conveyance of an immovable property in his favour to enable him to join as a partner in the proposed rice mill. Hence a sham and nominal sale deed was executed and registered on 04.07.1974 in respect of the suit property, namely common half share of 0.11.0 hectare land comprised in old Survey No.144A and new Survey No.15/7 in Irugalur village, Gobichettiplayam Taluk, in favour of the respondent/defendant. As the said sale was sham and nominal, no consideration was received from him and the title and possession of the property continued to rest with the appellants/plaintiffs. The original sale deed was also not handed over to the respondent/defendant and the same was retained by the third appellant/third plaintiff. Patta had been issued in the name of the third appellant/third plaintiff. Since the sale was sham and nominal, the respondent/defendant did not take steps to get the patta transferred in his name. However, the rice mill building, machineries and other affixtures alone were used as the properties of the partnership firm having the appellants/plaintiffs and the respondent/defendant as partners. In the rice mill alone, excluding the land on which the rice mill has been built, the respondent/defendant had got a common half share, whereas the appellants/plaintiffs were jointly entitled to the other half. By a partition deed dated 06.09.1984, the appellants/plaintiffs divided the 3/6 share in the building, machineries, electric https://hcservices.ecourts.gov.in/hcservices/ service connection and license of the rice mill alone among themselves and each one of them was allotted 1/6 share. On 05.09.1984, the plaintiffs 2 and 3 conveyed their share in the rice mill in favour of the first appellant/first plaintiff under a registered sale deed. Hence the first appellant became the sole partner of the respondent in respect of the rice mill. The understanding between the appellants and the respondent was that all the appellants together should invest Rs.75,000/- and the respondent should invest Rs.75,000/- and as such, in the rice mill business to be started with the said capital, respondent/defendant would be entitled to 50% of the profit, whereas the appellants/plaintiffs together would be entitled to the other 50% of the profit. It was also a specific understanding that the respondent/defendant would not have any right in the land and he would not claim any right under the sale deed dated 04.07.1974. The necessary building for the mill was constructed and the machineries were erected in 1976 and the mill was started functioning from 1977, after obtaining necessary license. Till January, 1998, the mill was run profitably and the profit was shared as per the above mentioned understanding. Thereafter, due to the non-cooperation on the part of the respondent/defendant, there arose problems in running the rice mill. When the respondent/defendant was asked to pay 50% of the electricity consumption charges, he refused to pay the same. Therefore, the production in the rice mill was stopped. Under such circumstances, with the intention of causing loss to the appellants/ plaintiffs and to make wrongful gain to himself, the respondent/defendant issued a notice dated 26.03.1998 seeking dissolution of the partnership and appointment of arbitrators for taking accounts and dividing the properties of the partnership firm. The said notice was suitably replied. Despite the same, on 28.05.1998, the respondent/defendant tried to dig pits and plant coconut saplings in the suit property and the said attempt was successfully thwarted. Under such circumstances, the appellants/plaintiffs were constrained to file the suit for a declaration that they are the absolute owners of the suit property and for an injunction against the respondent/defendant not to cause any disturbance to the appellants'/plaintiffs' possession and enjoyment of the suit property. 3. The suit was resisted by the respondent/defendant (cross-objector) by filing a written statement containing allegations, which are summarised as follows:- The plaint averment that the sale deed dated 04.07.1974 made in favour of the respondent/defendant was sham and nominal, is false. The same is a genuine sale transaction, in which the respondent/defendant got title to an undivided half share in the property comprised in old Survey No.144A and new Survey No.15/7 having an extent of 0.11.0 hectare in Irugalur village, Gobichettiplayam Taluk, over which the mill building, drying yard, etc. situate. From the date of the said sale deed, the defendant https://hcservices.ecourts.gov.in/hcservices/ became a joint owner along with the plaintiffs and the license to run the rice and oil mill in the name and style of "Sri Vijayalakshmi Rice and Oil Mill" was applied for and obtained jointly in the names of the respondent/defendant and the third appellant/third plaintiff. The same was started in 1974. The said rice and oil mill business is a partnership business run by the respondent/defendant and the third appellant/third plaintiff, both of them having contributed equal amount for the purchase of machineries and for the construction of the building. The said partnership is a partnership at will. While the business was running smoothly, in or about the month of February 1998, the appellants/plaintiffs, due to misunderstanding, locked the rice mill premises and stopped the business. Hence the respondent/defendant was convinced that it was no longer feasible to continue the said partnership business and that it was fit to dissolve the said partnership. With the said object in view, the respondent/defendant issued a notice dated 26.03.1998 dissolving the partnership with effect from 01.04.1998. The said notice was received by the plaintiffs and hence the partnership stood dissolved with effect from 01.04.1998. Following the said notice, the respondent/defendant filed a suit in O.S.No.124/1998 against the appellants/plaintiffs for settlement of accounts and distribution of assets of the firm and such suit is pending. Under such circumstances, the appellants/plaintiffs have come forward with the frivolous suit. The sale deed dated 04.07.1974 under which the respondent/defendant purchased half share in the land over which the mill has been constructed had been kept in the mill premises along with other documents for making it readily available to the officials who might visit the mill for inspection and in February, 1998, while locking the mill premises, the appellants/plaintiffs took away the sale deed from the mill. The mere fact that the sale deed under which the respondent/defendant purchased half share in the property is now available with the appellants/plaintiffs, shall not confer any title on them and the same will not, in any way, affect the title and interest of the respondent/defendant in the suit property. The alleged partition deed dated 06.09.1984 and the sale deed dated 05.09.1984, shall not be binding on the respondent/defendant. The appellants/plaintiffs shall not have a right to have the mill premises locked and the entry of the respondent/defendant to the mill premises denied. They are not entitled to do so. In law, the respondent/defendant is entitled to have access to the suit mill premises and enjoyment of the land on which it is being run. The relief of declaration sought for by the appellants/plaintiffs on the premise that the sale deed in favour of the respondent/defendant is sham and nominal, is not sustainable. Though the respondent/defendant does have a right of access to the mill premises and the business, the averment that the respondent/defendant attempted to trespass into the suit property and plant coconut saplings, as a fact constituting the cause of action, is nothing but a false and imaginary one. There is no cause of action for seeking the relief of injunction also. In any event, the plaintiffs cannot seek such an injunction against the https://hcservices.ecourts.gov.in/hcservices/ respondent/defendant, a co-owner. For all the reasons stated above the suit should be dismissed. 4. Based on the above said pleadings, the trial court framed the following issues:- i)Whether the plaintiffs are entitled to get the relief of declaration as prayed for? ii)Whether the plaintiffs are entitled to the relief of permanent injunction as prayed for? iii)To what relief, the plaintiffs are entitled? 5. The parties went for trial based on the above said pleadings, in which two witnesses were examined as P.Ws.1 and 2 and five documents were marked as Exs.A1 to A5 on the side of the appellants/plaintiffs, whereas two witnesses were examined as D.Ws.1 and 2 and six documents were marked as Ex.B1, Ex.B1A and Exs.B2 to B5 on the side of the respondent herein/defendant. The learned trial judge considered the pleadings and evidence in the light of the points urged in the arguments submitted on both sides and, upon such consideration, came to the conclusion that the appellants'/plaintiffs' plea that sale deed dated 04.07.1974 was sham and nominal, was not substantiated. Consequently, the learned trial judge dismissed the suit so far as the relief of declaration is concerned. However holding that the appellants/plaintiffs continued to be in possession and management of the mill, the learned trial judge held that the appellants/plaintiffs were entitled to the relief of injunction. Thus the learned trial judge passed a decree dismissing the suit in respect of the relief of declaration and decreeing the suit in respect of the relief of permanent injunction. 6. Aggrieved by and challenging the decree of the trial court so far as the prayer for declaration is concerned, the appellants/plaintiffs have come forward with the present appeal on various grounds set out in the memorandum of appeal. The respondent/cross-objector/defendant has filed cross-objection No.34 of 2003 questioning the correctness of that part of the decree passed by the trial court granting the relief of permanent injunctions on the grounds set out in the memorandum of cross- objection. 7. This court heard the arguments advanced by Mr.R.T.Doraisamy, learned counsel for the appellants and by Mr.T.Murgamanickam, learned counsel for the respondent/cross- objector. The entire materials available on record were also perused. 8. The following are the points that arise for https://hcservices.ecourts.gov.in/hcservices/ determination in the appeal and the cross objection:- i)Whether the appellants/plaintiffs are entitled to get the relief of declaration as prayed for by them in the plaint against the respondent/cross objector/defendant? ii)Whether the appellants/plaintiffs are not entitled to the relief of permanent injunction as prayed for by them against the respondent/cross objector/defendant? iii)To what relief the appellants/plaintiffs are entitled? Point No.i 9. The plaintiffs in the suit are the appellants herein. The suit was filed seeking a declaration that the suit property absolutely belonged to the appellants/plaintiffs and for a permanent injunction against the respondent/defendant not to interfere with the appellants/plaintiffs possession and enjoyment of the suit property. The suit property is described to be an undivided common half share of land in old Survey No.144A and new Survey No.15/7 in Irugalur village, Gobichettiplayam Taluk, within specified boundaries, having an extent of of 0.11.0 hectare. The claim of the appellants/plaintiffs for the relief of declaration is based on their contention that the sale deed admittedly executed by the first appellant/first plaintiff and by the third appellant for himself and as guardian of the second appellant, who was then a minor, in favour of the respondent/defendant was a sham and nominal one and hence no transfer of title took place. The relief of injunction has been sought for as a consequential relief mainly on the basis of the above said averments. The suit was resisted by the respondent/defendant contenting that the sale deed under which the suit property was sold to the respondent/defendant was not sham and nominal; that by virtue of the said purchase made, the respondent/defendant became entitled to a common half share in the land having an extent of 0.11.0 hectare comprised in suit old Survey No.144A and new Survey No.15/7 in Irugalur village, Gobichettiplayam Taluk; that a rice and oil mill business was started in the said property as a partnership business in which the respondent/defendant was entitled to a share of 50% in the profit and that hence the appellants/plaintiffs were not entitled to either the relief of declaration or the relief of injunction. It was also contended by the respondent/defendant that the cause of action alleged for seeking the relief of injunction was false and imaginary. 10. Though the trial court negatived the plea of the appellants/plaintiffs that the sale deed executed in favour of the respondent/defendant in respect of the suit property was sham and nominal and hence held that they were not entitled to the relief of declaration, it has chosen to grant the relief of injunction on the https://hcservices.ecourts.gov.in/hcservices/ premise that the first plaintiff happened to be in management of the partnership business, namely rice and oil mill business in the name and style of Sri Vijayalakshmi Rice and Oil Mill and that hence the respondent/defendant could not be allowed to interfere with the same and his right shall be confined to seek settlement of accounts and payment of his share on such settlement. When the business is carried on as a partnership business and the partnership is sought to be dissolved claiming the same to be a partnership at will, then the partner who is excluded from the management of the partnership business shall be justified in seeking an injunction restraining the other partner from carrying on the business without settling the accounts and at the same time denying the right of the other partner. However, the learned trial judge chose to grant a decree for perpetual injunction against the respondent/defendant not to interfere with the appellants'/plaintiffs' possession of the suit property and management of the rice and oil mill. 11. The main question that remains to be considered in this case is whether the sale deed dated 04.07.1974 was sham and nominal effecting no transfer of title in favour of the respondent/defendant and whether the appellants/plaintiffs are entitled to the relief of declaration as prayed for? It is an admitted fact that an extent of 0.11.0 hectare (equal to 26 34/54 cents) of land, within specified boundaries comprised in old Survey No.144A and new Survey No.15/7 in Irugalur village, Gobichettiplayam Taluk belonged to the appellants/plaintiffs as their ancestral joint family property. As such there is no dispute regarding the fact that the appellants 1 to 3 / plaintiffs 1 to 3 did have 1/3 share each in the said property prior to the execution of the disputed sale deed concerned in this case. It is also not in dispute that out of the above said extent of 26 34/54 cents, an undivided half share measuring 13 17/54 cents was purported to be sold under the sale deed dated 04.07.1974 to the respondent/defendant. The said sale deed was registered on the file of the Sub-Registrar, Nambiyur as document No.887/1974. The original sale deed has been produced by the appellants/plaintiffs and marked as Ex.A1. A certified copy of the same has been marked as Ex.B1. It is also not in dispute that the said sale deed was executed by the first appellant and the third appellant/third plaintiff for himself and as the natural guardian of the 2nd appellant, who was then a minor. The suit was filed in the year 1998. At the time of filing of the suit, the appellants 1 and 2 were aged about 45 years and 35 years respectively as per the averment found in the plaint. Therefore, it is quite obvious that 17 years prior to the date of filing of the suit i.e. in 1981 itself, the second appellant attained majority. The first appellant was a major even on the date of Ex.A1 and he was also one of the executants of Ex.A1. The sale under Ex.A1 is not challenged as one executed neither for necessities nor for the benefit of the minor and hence not binding on the appellant No.2/plaintiff No.2 so far as his share in the family property is concerned. In fact when https://hcservices.ecourts.gov.in/hcservices/ such a sale is made on behalf of the minor also, the minor, on attaining majority should have approached the court for setting aside the sale within three years from the date of attaining majority as per article 60 of Limitation Act. In this case, it has not been done by the second appellant within the said period of limitation after attaining the age of majority. That is the reason why the appellants have taken a stand that the transaction under Ex.A1-sale deed was not at all a valid sale transaction in the eye of law, as the said sale was a sham and nominal one. 12. Of course, it is true that no transfer of title takes place under a sham and nominal deed as it is non-est in the eye of law. But a person who admits the execution of a deed, but claims it to be a sham and nominal deed and that hence no legal transfer of title took place under the said deed, is bound to prove the same by reliable evidence. Such a burden rests heavily on the person alleging the transaction to be sham and nominal. In this case, appellants do admit that Ex.A1-sale deed dated 04.07.1974 was executed and registered in favour of the respondent/defendant. Therefore, the burden of proving it to be a sham and nominal deed heavily lies on the appellants. In support of their contention that Ex.A1 sale deed is a sham and nominal one, the appellants have contended that even after the execution of the said deed, the same was not handed over to the respondent/defendant, but was retained by the third appellant since no amount was paid as consideration by the respondent/defendant for the said transaction. It is also their contention that right from the date of execution of Ex.A1, the respondent/defendant did not exercise any right as the owner of the property sought to be conveyed under Ex.A1; that the revenue records continued to stand in the names of the appellants and that the said deed was executed as a sham and nominal deed on the insistence of the respondent/defendant as a condition for becoming a partner of the rice and oil mill business proposed to be started with a specific understanding that no right would be claimed by the respondent/defendant under the said document 13. In this regard, the appellants also rely on two more documents, namely Ex.A2 and A3. Ex.A2 is the certified copy of the RSR register for the entire extent of 0.11.0 hectare comprised in survey No.15/7 in the name of the third appellant Avinashi Gounder. Ex.A3 is the chitta extract in the name of appellants 1 and 2 herein. Even though partition among the appellants was effected in 1984, the mutation of revenue records in the names of the appellants 1 and 2 was made only in 1994. Similar document was filed by the respondent/defendant as Ex.B2 issued in the year 1999 in the names of appellants 1 and 2 and the respondent/defendant for the extent of 0.11.0 hectare comprised in Survey No.15/7. Though such a document was filed by the respondent/defendant to show that the property was assessed for revenue jointly in the names of appellants 1 and 2 and the respondent, the respondent/defendant has admitted that patta was not changed in his name pursuant to the purchase made by him under Ex.A1. Exs.A4 and A5 are notice and copy https://hcservices.ecourts.gov.in/hcservices/ of the reply notice. From Exs.A2 and A3 coupled with the oral testimony of the witnesses examined on either side, it can be inferred that the revenue records continued to be in the name of Avinashi Gounder, which came to be transferred in the names of appellants 1 and 2/plaintiffs 1 and 2 subsequently and that no mutation of name in the revenue records was effected pursuant to the execution of Ex.A1-sale deed. But whether the mere fact that mutation of name was not effected in the revenue records pursuant to the sale made under Ex.A1 and the further fact that patta continued to stand in the name of the third appellant and then in the names of the first and second appellants, shall be enough to hold that Ex.A1-sale deed is a sham and nominal one? The answer shall be in the negative. Unless the appellants/plaintiffs are able to prove that the said document was not given effect to and was not acted upon and that the said document was executed as a sham and nominal one without intending to effect a transfer of title, the appellants/plaintiffs shall not succeed in discharging the burden cast upon them. 14. In this regard, even though the appellants/plaintiffs would have stated that no consideration did pass for the purported transfer of title under Ex.A1, there is lack of reliable evidence adduced on the side of the appellants/ plaintiffs. P.W.1 is none other than the first appellant/first plaintiff. As such the interested testimony of P.W.1 shall be approached with caution. Though the case of the appellants is that Ex.A1 sale is a sham and nominal one and P.W.1 would venture to state that the said transaction under Ex.A1 was a sham and nominal one, during cross- examination he admitted that he did not know the meaning of a sham and nominal transaction "epg fpiuak; vd;why; vdf;F mh;j;jk; bjhpahJ". P.W.1 was one of the executants of the said sale deed and hence was a signatory to Ex.A1 - sale deed. The above said admission made by him that he does not know the meaning of a sham and nominal deed coupled with the further fact that he has chosen to state that all the three appellants signed the said sale deed, which is incorrect, will greatly impair the reliability of the evidence of P.W.1. The document was signed by the first appellant (P.W.1) and Avinashi Gounder (third appellant) for himself and as the guardian of the second appellant. As against the said fact P.W.1 has chosen to state that all the three have signed the document. Furthermore, the third appellant Avinashi Gounder did not enter the witness box to give evidence in support