Case: The Jumma Masjid, Mercara Vs. Kodimaniandra Deviah

1. This is an appeal against the Judgment of the High Court of Madras, dismissing the suit filed by the appellant, as Muthavalli of the Jumma Masjid, Mercara, for possession of a half-share in the properties specified in the plaint. The facts are not in dispute. There was a joint family consisting of three brothers, Santhappa, Nanjundappa and Basappa. Of these, Santhappa died unmarried, Basappa died in 1901, leaving behind a widow Gangamma, and Nanjundappa died in 1907 leaving him surviving his widow Ammakka, who succeeded to all the family properties as his heir. On the death of Ammakka, which took place in 1910, the estate devolved on Basappa, Mallappa and Santhappa, the sisters grandsons of Nanjundappa as his next reversioners. The relationship of the parties is shown in the following genealogical table :2. On August 5, 1900, Nanjundappa and Basappa executed a usufructuary mortgage over the properties which form the subject-matter of this litigation, and one Appanna Shetty, having obtained an assignment thereof, filed a suit to enforce it, O. S. 9 of 1903, in the court of the Subordinate Judge, Coorg. That ended in a compromise decree, which provided that Appanna Shetty was to enjoy the usufruct from the hypotheca till August, 1920, in full satisfaction of all his claims under the mortgage, and that the properties were thereafter to revert to the family of the mortgagors. By a sale deed dated November 18, 1920, Ex. III, the three reversioners, Basappa, Nallappa and Santhappa sold the suit properties to one Ganapathi, under whom the respondents claim, for a consideration of Rs. 2,000. Therein the vendors recite that the properties in question belonged to the joint family of Nanjundappa and his brother Basappa, that on the death of Nanjundappa, Ammakka inherited them as his widow, and on her death, they had devolved on them as the next reversioners of the last male owner. On March 12, 1921, the vendors executed another deed, Ex. IV, by which Ex. III was rectified by inclusion of certain items of properties, which were stated to have been left out by oversight. It is on these documents that the title of the respondents rests3. On the strength of these two deeds, Ganapathi sued to recover possession of the properties comprised therein. The suit was contested by Gangamma, who claimed that the properties in question were the self-acquisitions of her husband Basappa, and that she, as his heir, was entitled to them. The Subordinate Judge of Coorg who tried the suit accepted this contention, and his finding was affirmed by the District Judge on appeal, and by the Judicial Commissioner in second appeal. But before the second appeal was finally disposed of, Gangamma died on February 17, 1933. Thereupon Ganapathi applied to the revenue authorities to transfer the patta for the lands standing in the name of Gangamma to his own name, in accordance with the sale deed Ex. III. The appellant intervened in these proceedings and claimed that the Jumma Masjid, Mercara, had become entitled to the properties held by Gangamma, firstly, under a sadakah or gift alleged to have been made by her on September 5, 1932, and, secondly, under a deed of release executed on March 3, 1933, by Santhappa, one of the reversioners, relinquishing his half-share in the properties to the mosque for a consideration of Rs. 300. By an order dated September 9, 1933, Ex. II, the revenue authorities declined to accept the title of the appellant and directed that the name of Ganapathi should be entered as the owner of the properties. Pursuant to this order, Ganapathi got into possession of the properties4. The suit out of which the present appeal arises was instituted by the appellant on January 2, 1945, for recovery of a half-share in the properties that had been held by Gangamma and for mesne profits. In the plaint, the title of the appellant to the properties is based both on the gift which Gangamma is alleged to have made on September 5, 1932, and on the release deed executed by Santhappa, the reversioner, on March 3, 1933. With reference to the title put forward by the respondents on the basis of Ex. III and Ex. IV, the claim made in the plaint is that as the vendors had only a spes successionis in the properties during the lifetime of Gangamma, the transfer was void and conferred no title. The defence of the respondents to the suit was that as Santhappa had sold the properties to Ganapathi on a representation that he had become entitled to them as reversioner of Nanjundappa, on the death of Ammakka in 1910, he was estopped from asserting that they were in fact the self-acquisitions of Basappa, and that he had, in consequence, no title at the dates of Ex. III and Ex. IV. The appellant, it was contended, could, therefore, get no title as against them under the release deed, Ex. A, dated March 3, 19335. The District Judge of Coorg who heard the action held that the alleged gift by Gangamma on September 5, 1932, had not been established, and as this ground of title was abandoned by the appellant in the High Court, no further notice will be taken of it. Dealing next with the title claimed by the appellant under the release deed, Ex. A, executed by Santhappa, the District Judge held that as Ganapathi had purchased the properties under Ex. III on the faith of the representation contained therein that the vendors had become entitled to them on the death of Ammakka in 1910, he acquired a good title under S. 43 of the Transfer of Property Act, and that Ex. A could not prevail as against it. He accordingly dismissed the suit. The plaintiff took the matter in appeal to the High Court, Madras, and in view of the conflict of authorities on the question in that Court, the case was referred for the decision of a Full Bench. The learned Judges who heard the reference agreed with the court below that the purchaser under Ex. III had, in taking the sale, acted on the representation as to title contained therein, and held that as the sale by the vendors was of properties in which they claimed a present interest and not of a mere right to succeed in future, S. 43 of the Transfer of Property Act applied, and the sale became operative when the vendors acquired title to the properties on the death of Gangamma on February 17, 1933. In the result, the appeal was dismissed. The appellant then applied for leave to appeal to this Court under Art. 133 (1) (c), and the same was granted by the High Court of Mysore to which the matter had become transferred under S. 4 of Act 72 of 1952. That is how the appeal comes before us.

Reasoning: Considering the scope of the section on its term, it clearly applies whenever a person transfers property to which he has no title on a representation that he has a present and transferable interest therein, and acting on that representation, the transferee takes a transfer for consideration. When these conditions are satisfied, the section enacts that if the transferor subsequently acquires the property, the transferee becomes entitled to it, if the transfer has not meantime been thrown up or cancelled and is subsisting. There is an exception in favour of transferees for consideration in good faith and without notice of the rights under the prior transfer. But apart from that, the section is absolute and unqualified in its operation. It applies to all transfers which fulfil the conditions prescribed therein, and it makes no difference in its application, whether the defect of title in the transferor arises by reason of his having no interest whatsoever in the property, or of his interest therein being that of an expectant heirSection 6(a) enacts a rule of substantive law, while S. 43 enacts a rule of estoppel which is one of evidence. The two provisions operate on different fields, and under different conditions, and we see no ground for reading a conflict between them or for cutting down the ambit of the one by reference to the other. In our opinion, both of them can be given full effect on their own terms, in their respective spheres. To hold that transfers by persons who have only a spes successionis at the date of transfer are not within the protection afforded by S. 43 would destroy its utility to a large extentThere would have been considerable force in this argument if the question fell to be decided solely on the terms of S. 6(a). Rules of estoppel are not to be resorted to for defeating or circumventing prohibitions enacted by statutes on grounds of public policy. But here the matter does not rest only on S. 6(a). We have, in addition, S. 43, which enacts a special provision for the protection of transferees for consideration from persons who represent that they have a present title, which, in fact, they have not. And the point for decision is simply whether on the facts the respondents are entitled to the benefit of this section. If they are, as found by the courts below, then the plea of estoppel raised by them on the terms of the section is one pleaded under, and not against the statute15. This reasoning is open to the criticism that it ignores the principle underlying S. 43. That section embodies, as already stated, a rule of estoppel and enacts that a person who makes a representation shall not be heard to allege the contrary as against a person who acts on that representation. It is immaterial whether the transferor acts bona fide or fraudulently in making the representation. It is only material to find out whether in fact the transferee has been misled. It is to be noted that when the decision under consideration was given, the relevat words of S. 43 were, where a person erroneously represents, and now, as amended by Act 20 of 1929, they are where a person fraudulently or erroneously represents, and that emphasises that for the purpose of the section it matters not whether the transferor acted fraudulently or innocently in making the representation, and that what is material is that he did make a representation and the transferee has acted on it. Where the transferee knew as a fact that the transferor did not possess the title which he represents he has, then he cannot be said to have acted on it when taking a transfer, Section 43 would then have no application, and the transfer will fail under S. 6(a). But where the transferee does act on the representation, there is no reason why he should not have the benefit of the equitable doctrine embodied in S. 43, however fraudulent the act of the transferor might have been16. The learned Judges were further of the opinion that in view of the decision of the Privy Council in Annanda Mohan Roy v. Gour Mohan Mullick, 50 Ind App 239 : ILR 50 Cal 929 : (AIR1923 PC 189) and the decision in Lakshmi Narayana Jagannada Raju v. Varada Lakshmi Narasimha, ILR 39 Mad 554   : (AIR 1916 Mad 579) which was approved therein, the illustration to S. 43 must be rejected as repugnant to it. In Jagannada Rajus case, ILR 39 Mad 554   : (AIR 1916 Mad 579) the question was whether a contract entered into by certain presumptive reversioners to sell the estate which was then held by a widow as heir could be specifically enforced, after the succession had opened. It was held that as S. 6 (a) forbade transfers of spes successionis, contracts to make such transfers would be void under S. 23 of the Contract Act, and could not be enforced. This decision was approved by the Privy Council in 50 Ind App 239: ILR 50 Cal 929: (AIR 1923 PC 189  ) where also the question was whether a contract by the nearest reversioner to sell property which was in the possession of a widow as heir was valid and enforceable, and it was held that the prohibition under S. 6(a) would become futile, if agreements to transfer could be enforced. These decisions have no bearing on the question now under consideration, as to the right of a person who for consideration takes a transfer of what is represented to be an interest in praesenti. The decision in 65 Mad LJ 588 : (AIR 1933 Mad 795  ) is, in our view, erroneous, and was rightly overruled in the decision now under appeal18. The preponderance of judicial opinion is in favour of the view taken by the Madras High Court in 29 Mad LJ 733 : (AIR 1915 Mad 972  ), and approved by the Full Bench in the decision now under appeal. In our judgment, the interpretation placed on S. 43 in those decisions is correct and the contrary opinion is erroneous. We accordingly hold that when a person transfers property representing that he has a present interest therein, whereas he has in fact, only a spes successionis, the transferee is entitled to the benefit of S. 43, if he has taken the transfer on the faith of that representation and for consideration. In the present case, Santhappa, the vendor in Ex. III, represented that he was entitled to the property in praesenti, and it has been found that the purchaser entered into the transaction acting on that representation. He therefore acquired title to the properties under S. 43 of the Transfer of Property Act, when Santhappa became in title on the death of Gangamma on February 17, 1933 and the subsequent dealing with them by Santhappa by way of release under Ex. A did not operate to vest any title in the appellant.