THE HON’BLE SRI JUSTICE B.CHANDRA KUMAR SECOND APPEAL No.880 of 2008 Dated:- 24th June, 2011 Between:- Smt.Kamalabai and 4 others …Appellants AND Smt.P.Alamelu and 6 others …Respondents THE HON’BLE SRI JUSTICE B.CHANDRA KUMAR SECOND APPEAL No.880 of 2008 JUDGMENT:- This appeal is directed against the judgment and decree dated 30.06.2006 passed in A.S.No.86 of 2000 by the I Additional Chief Judge, City Civil Court, Secunderabad (‘the lower appellate Court’, for brevity), whereby and whereunder, the judgment and decree dated 05.06.2000 passed in O.S.No.1266 of 1994 by the XI Junior Civil Judge, City Civil Court, Secunderabad (‘the trial Court’, for brevity), dismissing the suit filed by the appellants herein was confirmed. 2. The parties will be hereinafter referred to as they were arrayed before the trial Court, for the sake of convenience, 3. The brief facts that lead the parties to file this appeal are as follows:- The first plaintiff – Smt. B.Kamalabai is the wife of the second plaintiff – B.Bala Lingam. The first defendant – P.Alimelamma is the wife and other defendants are the children of one Late P.Mallaiah. The second plaintiff and Late P.Mallaiah were working in South Central Railway and they were colleagues and close friends. 4. The plaint schedule property, i.e., open land admeasuring 101 Sq. Yards bearing Plot No.72 in Survey No.82 situated to the west of existing building bearing municipal No. Old 2-171 of an extent of 99 Sq. Yards (New No.12-12-213 (Part) situated in Ravindra Nagar, Sithafal Mandi, Secunderabad, (hereinafter referred to as ‘the disputed property’) originally belonged to one M.A.Baig. The specific case of the plaintiffs is that the first plaintiff entered into agreement of sale dated 21.09.1974 with the original owner of the disputed property – M.A.Baig, agreeing to purchase the same for a total sale consideration of Rs.11,000/- and paid an advance of Rs.2,000/- on the same day. Ex.A.3 is the agreement of sale dated 03.06.1975. However, the first plaintiff could arrange only Rs.2,500/- by way of cash and another Rs.3,300/- by sale of her jewels and gold ornaments, i.e., total of Rs.5,800/- only. In fact, said jewels and gold ornaments were sold through Late P.Mallaiah, who passed a receipt dated 26.09.1974 for an amount of Rs.5,800/-. As the plaintiffs could not arrange the remaining amount balance sale consideration, they requested Late P.Mallaiah to advance an amount of Rs.4,000/- to meet the shortfall in payment of balance of sale consideration. It is also the case of the plaintiffs that Late P.Mallaiah made the plaintiffs to believe that existence of any house property in their names or in the names of their relatives would be an impediment and bar the prospects of the second plaintiff in securing loan from Railways. Late P.Mallaiah, who is said to be a money-lender, agreed to advance the said amount of Rs.4,000/- subject to the condition that the property purchased, i.e., the disputed property should be given to him as collateral security for the amount advanced by him. The plaintiffs agreed for the same. As agreed upon, with the consent of the plaintiffs, the vendor of the disputed property – M.A.Baig executed a sale deed dated 07.10.1974 in the name of Late P.Mallaiah. This sale deed was only a nominal one executed in the name of Late P.Mallaiah as collateral security for the amount advanced by him. Late P.Mallaiah agreed to re-convey the disputed property to the plaintiffs soon after receiving of Rs.4,000/- advanced by him and accordingly, he executed a document dated 09.11.1974 agreeing to re-convey the disputed property to the plaintiffs. 5. Subsequently, disputes arose between the parties. The plaintiffs filed O.S.No.2359 of 1977 on the file of the XI Assistant Judge, City Civil Court, Secunderabad for specific performance basing on document dated 09.11.1974 said to have been executed by Late P.Mallaiah for re-conveyance of the disputed property. The specific case of the defendants is that Late P.Mallaiah himself purchased the disputed property for a valuable consideration from its original owner – M.A.Baig, who executed a registered sale deed in favour of Late P.Mallaiah for a total sale consideration of Rs.9,500/- and after purchase, the property was leased out to the plaintiffs and when the plaintiffs did not vacate the disputed property, Late P.Mallaiah got issued a legal notice dated 04.04.1976 demanding the second plaintiff to vacate the disputed property and the second plaintiff issued a reply notice by making false allegations that the defendants have subsequently denied that the plaintiffs entered into the agreement to purchase the disputed property from its original owner – M.A.Baig. The defendants have also denied that Late P.Mallaiah advanced an amount of Rs.4,000/- to the plaintiffs as a collateral security for the amount advanced by him and that the sale deed dated 07.10.1974 obtained by Late P.Mallaiah in his name is a nominal one. Their specific case is that Late P.Mallaiah leased out the disputed property to the plaintiffs. 6. Late P.Mallaiah also filed O.S.No.1554 of 1976 on the file of the XI Assistant Judge, City Civil Court, Secunderabad, against the plaintiffs for recovery of vacant possession of the disputed property and for arrears of rent. During the pendency of the said suits, Late P.Mallaiah died and his Legal Representatives were brought on record. Both the suits, i.e., O.S.Nos.2359 of 1977 filed by the plaintiffs and O.S.No.1554 of 1976 filed by Late P.Mallaiah were clubbed together and a common judgment was pronounced on 31.07.1987 and O.S.No.1554 of 1976 filed by Late P.Mallaiah was dismissed and O.S.No.2359 of 1977 filed by the plaintiffs was decreed. Aggrieved by the dismissal of O.S.No.1554 of 1976, the Legal Representatives of Late P.Mallaiah, who are the defendants herein, preferred A.S.No.218 of 1987 before the Additional Chief Judge, City Civil Court, Secunderabad, and challenging the judgment and decree passed in O.S.No.2359 of 1977, they filed an appeal in A.S.No.212 of 1987 on the file of the same Court. Both the appeals were clubbed together and a common judgment was pronounced on 30.08.1993 dismissing A.S.No.218 of 1987 and allowing A.S.No.212 of 1987. Aggrieved by the same, appeals in S.A.Nos.187 and 188 of 1994 were filed before this Court. It appears that S.A.No.187 of 1994 was dismissed on 01.02.2005 and S.A.No.188 of 1994 was also dismissed on 24.02.2005 and consequently, the judgment passed by the first appellate court was confirmed. Thus, the net result of the suit filed by Late P.Mallaiah in O.S.No.1554 of 1976 seeking recovery of possession and claiming arrears of rents against the plaintiffs’ and the suit filed by the plaintiffs in O.S.No.2359 of 1977 for specific performance basing on re-conveyance deed stands dismissed. 7. With this background, the plaintiffs have filed the present suit in O.S.No.1266 of 1994 before the trial Court seeking declaration of title and for consequential relief of cancellation of sale deed dated 07.10.1974 executed by M.A.Baig in favour of Late P.Mallaiah and for redemption of the disputed property and to direct the defendants to receive the balance amount of Rs.4,000/- payable under the mortgage. Their specific case is that the sale deed executed in favour of Late P.Mallaiah is only a nominal one as a security in disguise. Their further case is that they have been in continuous possession and enjoyment of the disputed property from the date of their purchase and that the defendants have no right or title over the same. It is also their case that since the disputed property was deemed to have been mortgaged for the loan amount given by Late P.Mallaiah, they are entitled to redeem the same. Their main case is that in the earlier round of litigation, it was held that the sale deed dated 07.10.1974 obtained by Late P.Mallaiah was a sham and a nominal document and it was obtained only as collateral security in disguise and, therefore, the plaintiffs are entitled for reliefs’ claimed by them. 8. The defendants specific case is that in the earlier litigation, the second plaintiff did not mention about the existence of re-conveyance deed said to have been executed by Late P.Mallaiah and it was held that the said document is a forged one and in view of the same, the plaintiffs are not entitled for any reliefs’ claimed by them. 9. On behalf of the plaintiffs, the second plaintiff himself was examined as P.W.1 and one Abdul Basith was examined as P.W.2 and one S.B.Prakash was examined as P.W.3 and Exs.A.1 to A.13 were marked. On behalf of the defendants, one P.Ram Narayana was examined as D.W.1 and one B.Vara Lakshmi was examined as D.W.2 and Exs.B.1 to B.17 were marked. Exs.X.1 to X.11 and Exs.C.1 and C.2 were also marked. 10. The trial Court, on appreciation of the oral and documentary evidence available on record, on issue No.1, i.e., Whether the plaintiffs are entitled for declaration of title to suit property, held that the plaintiffs failed to establish that they are entitled for declaration of title in respect of the disputed property mainly on the ground that the suit is hopelessly barred by limitation and on issue No.2, i.e., whether the plaintiffs are entitled for consequential relief of cancellation of the sale deed dated 07.10.1974 as prayed for, held that the plaintiffs are not entitled for the said relief since they were found not entitled for the main relief of declaration of title and on issue No.3, i.e., whether the plaintiffs are entitled for redemption of the suit property, held that the question of redemption arises only when there is mortgage between the parties and when it is the case of the plaintiff that the sale deed which was obtained in the name of Late P.Mallaiah is a nominal and a sham document and when there was no mortgage transaction between the plaintiff and Late P.Mallaiah, the question of redemption of mortgage property does not arise at all. Holding so, the trial Court dismissed the suit filed by the plaintiffs. 11. Aggrieved by the same, the plaintiffs carried the matter in appeal before the lower appellate Court. The lower appellate court, on re-appreciation of the oral and documentary evidence available on record, held that Section 58 of the Limitation Act prescribed the limitation for obtaining any declaration as three years and since Late P.Mallaiah filed the suit in O.S.No.1554 of 1976 against the plaintiffs for recovery of possession of the disputed property by asserting his title, thus the time started running against the plaintiffs from the year 1976 itself and, therefore, the suit field by the plaintiffs in the year 1994 is hopelessly barred by limitation. Upholding the other findings of the trial Court in the suit, the lower appellate Court dismissed the appeal confirming the judgment of the trial Court. Aggrieved by the same, the plaintiffs are before this Court as appellants in this Second Appeal. 12. Sri K.R.Narasimhan, learned counsel for the appellants/plaintiffs submitted that when in the earlier round of litigation it was categorically held that the sale deed dated 07.10.1974 executed in favour of Late P.Mallaiah was a nominal and a sham document, that itself is sufficient to declare the plaintiffs’ title over the disputed property. His main submission is that as the plaintiffs are the real and beneficial owners of the disputed property, both the Courts below ought to have declared the first plaintiff as the equitable owner entitled to the disputed property under Section 53 of the Transfer of Property Act. It is also his submission that no issue was framed with regard to the limitation and, therefore, lower appellate Court was not justified in giving a finding on the issue of limitation. It is also his submission that the lower appellate Court has committed error in appreciating the evidence, particularly, the evidence of the handwriting expert. It is also his submission that the lower appellate Court merely erred in mistaking entirely different old house, which was the subject matter of O.S.No.1553 of 1976 under which the first appellant Smt. Kamala Bai entered into an agreement with the vendor with possession by mixing up erroneously the said subject matter of O.S.No.1553 of 1976, which is contiguous open land exclusively purchased solely by the second appellate late Sri B.Ballalingam (who was her husband) from the original owner Baqi Khan under an absolute sale deed free from any dispute whatsoever. It is further submitted that the lower appellate Court ought to have granted the relief of redemption claimed by the plaintiff when it was held that the sale deed dated 07.10.1974 was not conveying any title to Late P.Mallaiah. It is also his submission that Late P.Mallaiah received an amount of Rs.500/- as part of the amount to be received by him as per the re-conveyance agreement and executed a receipt dated 24.04.1975 which is marked as Ex.A.5 in O.S.No.2359 of 1977 and that Late P.Mallaiah and his Legal Representatives admitted the execution of the said receipt in their written statement dated 28.06.1978 filed by Late P.Mallaiah and as amended by his Legal Representatives on 07.04.1986 in O.S. 13. Learned counsel has also explained the circumstances under which Late B.Balalingam – the first defendant had singed as attestor in the sale deed dated 07.10.1974 executed in favour of P.Mallaiah. It is also his submission that when Late P.Mallaiah himself admitted the execution of receipt dated 24.04.1975 for an amount of Rs.500/- as part of the amount to be received by him, the opinion of the handwriting expert that the said document is a forged one falls to ground. It is also his submission that Late P.Mallaiah never entered into witness box during his life time and that his admitted signatures were not obtained when he was alive and, therefore, no importance can be given to the opinion of the handwriting expert. It is also his submission that the standard signatures were not sent to the handwriting expert through Court. It is also his submission that standard signatures were not even certified by the concerned department. It is also his submission that the Court ought to have summoned standard signatures from the concerned department and ought to have sent the same to the handwriting expert. With regard to the limitation, it is his submission that the lower appellate Court has grossly erred in holding that the suit is barred by limitation as the period covered while prosecuting the earlier suits have to be excluded while computing the period of limitation. 14. Per Contra, Sri V.Hari Haran, learned counsel for the respondents/defendants submitted that the plaintiffs based their claim on the observation of the earlier judgments of the Courts as is evidenced from the plaint averments and that the agreement of sale dated 07.10.1974 executed in favour of Late P.Mallaiah did not fructify into a registered sale deed and there was no conveyance of title in favour of the plaintiffs at any point of time from the vendor of the disputed property and that the suit for specific performance filed by the plaintiffs in O.S.No.2359 of 1977 has been though allowed by the trail Court, the lower appellate Court, in appeal in A.S.No.212 of 1987, dismissed the suit filed by the plaintiffs and those findings have become final and that the lower appellate Court categorically held that the plaintiffs cannot seek for specific performance when they themselves claim that the defendants have no title over the disputed property and that the plaintiffs have based their claim of declaration of title to the disputed property on a stray observation made in the common judgment made in A.S.Nos. 212 and 218 of 1987. It is also his submission that possession was not delivered to the plaintiff by virtue of alleged agreement of sale. On the issue of limitation, learned counsel submitted that since the findings of both the trial Court and the lower appellate are concurrent, no interference is required by this Court on such findings and that no substantial question of law arises for adjudication in this appeal and, therefore, the appeal is liable to be dismissed. 15. The substantial questions of law that arise for consideration in this second appeal are (1) When the sale deed dated 07.10.1974 executed in favour of Late P.Mallaiah through which, the respondents have been claiming right has been declared as a nominal and a sham document, whether the lower appellate Court is justified in holding that the plaintiffs’ are not entitled for declaration of title; and (2) Whether the Courts below grossly erred in not excluding the time spent during earlier litigation and declaring the plaintiffs claim as time barred. Point No.1 16. It is not in dispute that the second plaintiff – B.Balalingam and Late P.Mallaiah – the husband of the first defendant and the father of the other defendants were working in South Central Railways and were colleagues and friends. The plaintiffs’ specific case is that the first plaintiff entered into an agreement of sale to purchase the disputed property from its original owner – M.A.Baig and paid an advance of Rs.2,000/- and obtained the agreement of sale from M.A.Baig on 03.06.1975. The agreed sale consideration was Rs.9,000/-. Since the plaintiffs could not arrange the entire sale consideration amount, the first plaintiff sold some of her gold ornaments for Rs.3,300/- through Late P.Mallaiah and she also gave another Rs.2,500/- to Late P.Mallaiah. Thus, a total of Rs.5,800/- was handed over to Late P.Mallaiah for which, the first plaintiff had obtained a receipt from Late P.Mallaiah. As the plaintiffs could not secure the balance sale consideration, they requested Late P.Mallaiah to arrange the balance sale consideration of Rs.4,000/- and accordingly, Late P.Mallaiah agreed to advance the amount subject to the condition that the property should be purchased in his name as collateral security. Accordingly, a sale deed was initially executed in favour of Late P.Mallaiah on 07.10.1974. It is also their case that Late P.Mallaiah executed an agreement of re-conveyance agreeing to re- convey the disputed property to the plaintiffs after receipt of the amount advanced by him. It is also their case that subsequently, the plaintiff paid Rs.500/- on 26.09.1974 to Late P.Mallaiah. The dispute arose when Late P.Mallaiah claimed the property and called upon the plaintiffs to vacate the premises alleging that the plaintiffs were his tenants. 17. Contrary to the above, the specific case of the defendants is that Late P.Mallaiah himself purchased the disputed property from its original owner – M.A.Baig by paying the entire sale consideration and that the plaintiffs were only tenants in the disputed property and that they have no title to the disputed property. Admittedly, Late P.Mallaiah filed a suit in O.S.No.1554 of 1976 for recovery of possession and for arrears of rent and, admittedly, the said suit was dismissed. Admittedly, the defendants were unsuccessful in the consequent first appeal as well as the Second Appeal. It is also not in dispute that the plaintiffs filed O.S.No.2359 of 1977 for specific performance of the re-conveyance agreement said to have been executed by Late P.Mallaiah. Though initially the said suit was decreed, but the appeal filed by the defendants in A.S.No.212 of 1987 was allowed dismissing the decreed suit in O.S.No.2359 of 1977. Admittedly, the Second Appeal challenging A.S.No.212 of 1987 was also dismissed. The net result is that the suit filed by Late P.Mallaiah seeking recovery of possession and for arrears of rent was dismissed and similarly the suits filed by the plaintiffs for specific performance of agreement of sale was also dismissed. 18. Be that as it may, it is not in dispute that in the earlier litigation, a specific finding has been given that the sale deed dated 07.10.1974 obtained by Late P.Mallaiah is only a nominal and a sham document and was a security in disguise and this finding attained finality. When this finding attained finality, it is clear that Late P.Mallaiah did not get any title over the disputed property. In the judgment (common) in A.S.Nos.212 and 218 of 1987, learned Additional Chief Judge, City Civil Courts, Secunderabad, observed as follows:- “Ex.B.1 sale deed (in favour of Late P.Mallaiah) is certainly a nominal one and that it was executed in favour of Late P.Mallaiah as a security for his debt but not intending to be a sale in the real sense of that term. There is no operative transfer resulting in the vesting of the title in Late P.Mallaiah. In that view of the matter, the transaction can only be called nominal.” 19. When Late P.Mallaiah has no title over the disputed property, the question of re-conveying the same does not arise at all. In fact, there was no need for the plaintiffs to seek the relief of specific performance of contract. A person who has no title over a property cannot convey any title to other person. Moreover, when a sale deed is declared as nominal one, there is no need to seek a further declaration of cancellation of said document. Moreover, the findings in O.S.No.2359 of 1977 have become final and the same cannot be re-opened. Though several decisions have been cited by the learned counsel for the appellants, I am of the view that there is no need to refer to all those decisions since it is clear that the Courts below failed to understand the earlier judgment of the learned Additional Chief Judge, City Civil Court, Secunderabad, in A.S.Nos.212 of 1987 and 218 of 1997 and thus, committed manifest error in denying the relief of declaration of title to the plaintiffs. Point No.2:- 20. As far as the declaration of title of the disputed property s concerned, since a finding has been given in the earlier proceeding that the sale deed executed in favour of Late P.Mallaiah is a nominal and a sham one, it is deemed that the plaintiffs’ case has been accepted. In the above referred appeals, the then learned Additional Chief Judge, City Civil Court, Secunderabad, observed that the remedy of the plaintiffs therein cannot be by way of suit for specific performance. Thus, it appears that the plaintiffs realised that they have to file a suit for declaration only when the appeals referred above were disposed off in the year 1993. Admittedly, the plaintiffs have been in possession of the disputed property. Admittedly, A.S.Nos.212 and 218 of 1997 were dismissed on 30.08.1993. It is settled law that time spent in good faith for prosecuting litigation has to be excluded in computing the period of limitation. Section 14 of the Limitation Act, 1963 deals with exclusion of time bonafide spent in prosecuting litigation. Admittedly, litigation was between the same parties and with regard to same subject matter. The present suit has been filed in the year 1994. In fact, during the pendency of the earlier litigation, i.e., after the disposal of the first appeals in A.S.Nos.212 and A.S.218 of 1987 and before filing of the Second Appeal Nos.187 and 188 of 1994, the plaintiffs ought to have sought the declaration of the title in the suit filed by them in O.S.No.2359 of 1977. Anyhow, since the appeal is continuation of the suit and during the pendency of the said suit, the plaintiffs have filed the present suit, it appears that their claim cannot be rejected on the ground that the suit is barred by limitation. As rightly contended by the learned counsel for the appellants, the period during which a litigation is pending has to be excluded while computing the period of limitation under Section 14 of the Limitation Act, 1963. 21. Having regard to the overall facts and circumstances of the case, it is clear that both the Courts below have committed error in rejecting the relief of declaration of title claimed by the plaintiffs. When, in the earlier litigation, a categorical finding has been given that the sale deed dated 07.10.1974 executed in favour of Late P.Mallaiah is wholly a nominal and a sham document, that itself is sufficient to declare that the plaintiffs are the owners of the disputed property. When it is held that the plaintiffs are the real purchasers and only a nominal document as a security in disguise was obtained by Late P.Mallaiah, it is clear that