Case: SIRDAR K.B.RAMACHANDRA RAJ URS (DEAD) THROUGH LRS Vs. SARAH C URS

2. The plaintiffs filed the suit concerning suit scheduled property inherited by Princess Leelavathi, wife of late K. Basavaraja Urs. She had adopted the defendant No.1 and died during the year 1958-59. The suit scheduled property along with adjoining properties devolved on late K. Basavaraja Urs, father of K.B. Ramachandra Raj Urs, defendant No.1, in terms of section 15 of the Hindu Succession Act, 1956. The Plaintiff Nos.1 and 2 were the close relatives and friend of the family of late K. Basavaraja Urs and the 2 nd plaintiff apart from being a close relative and friend of Defendant No.1, was also a Legal Advisor and Advocate of late K. Basavaraja Urs3. The property was let out to plaintiff No.2 in the year 1969 by late K. Basavaraja Urs and defendant No.1. Late K. Basavaraja Urs and defendant No.1 sold the adjoining property to various persons vide registered sale deeds. Late K. Basavaraja Urs offered to sell the suit scheduled property to the plaintiffs. On 24.4.1979, late K. Basavaraja Urs, represented by his son, i.e., defendant No.1 as power of attorney, entered into an agreement to sell with the plaintiffs for a consideration of Rs.1,50,000/- out of which a sum of Rs.1,00,000/- was received on the same day. The defendant No.1 agreed to obtain a clearance certificate under section 230-A of the Income Tax Act as also under the provisions of the Urban Land Ceiling Act. The plaintiffs continued to have the possession of suit property in part performance of the agreement dated 24.04.1979 and stopped paying rent4. The defendant No.1 always ensured the plaintiffs to execute the registered sale deed in terms of suit agreement after obtaining a clearance certificate from the Income Tax Department and under the Urban Land Ceiling Act. On 1.6.1993, defendant No.1 received the balance sale consideration of Rs.50,000/- from 2 nd plaintiff and executed a stamped receipt in favour of the plaintiffs with an undertaking to execute the deed of conveyance5. The defendant No.1, made the correspondence with the Income Tax Department to obtain the Income Tax clearance. However, the need to seek permission under the Urban Land Ceiling Authority vanished as per the decision of this Court concerning section 27 of the said Act as defendant No.1 was postponing to execute the registered sale deed on one pretext or the other. A legal notice dated 5.6.1990 was served, and after that, the suit had been filed on 19.9.1990 seeking specific performance6. Defendant Nos.1, 2, and 4 in their written statements contended that the 2 nd plaintiff claimed to be a close relative of late K. Basavaraja Urs. He was his lawyer and self-assumed trustee. He obtained the signatures of defendant no.1 on blank papers, which has been misused by the 2 nd plaintiff to create the agreement in question dated 24.4.1979. It was assured that agreement was obtained as a collateral document to secure professional charges, which, according to the plaintiff, remained unpaid7. The defendants denied the receipt of the sale consideration on 24.4.1979 and 1.6.1993 and also the subsequent correspondence between plaintiff No.2 and defendant No.1 and his Tax Consultant. The 2 nd plaintiff was never permitted to put up construction on the property by the defendant No.1. After the demise of Princess Leelavathi, the suit property devolved on late K. Basavaraja Urs and defendant No.1. The 1 st defendant has not conveyed his interest in the suit property in favour of plaintiffs. Defendants contended that no agreement was entered into with the plaintiffs. The suit is barred by time8. Defendant No.5, in his written statement, took the plea that the property being ancestral could not have been sold by defendant No.1 to the detriment of the 5 th defendant. There was no legal necessity to sell the property9. The trial court decreed the suit and recorded a finding that the agreement has been executed on 24.4.1979. The defendant No.1 has admitted his signatures on the suit agreement dated 24.4.1979 and receipt dated 1.6.1983. Defendant No.1 for himself and as a power of attorney holder of late K. Basavaraja Urs, executed the suit agreement and, therefore, he cannot be permitted to contend that he is not a party to the suit agreement in his individual capacity. They were required to obtain an income tax clearance certificate and after that to execute the registered sale deed, in which they have failed. Late K. Basavaraja Urs owned vast landed and house properties at Bangalore and Mysore. They were statutorily bound to obtain a clearance certificate from the Income Tax Department, and as they failed to obtain it, they cannot be permitted to contend that suit is barred by limitation. The High Court has affirmed the findings of the trial court10. The High Court has disbelieved the case set up by defendant No.1 that he had put his signatures on blank paper. Plaintiff No.2 was appointed as Judge of the High Court during September 1978; therefore, on 24.4.1979, there was no fiduciary relationship between them. Plaintiffs have also produced the original stamped receipt dated 1.6.1983 (Exhibit P-19) admitting the receipt of remaining Rs.50,000 by defendants No.1 in which a sum of Rs.42,000 was paid in cash and Rs.8,000 was paid by cheque. Defendant No.1 had admitted his signatures on Exh. P-19. Defendant No.1 also admitted that he had encashed the cheque. The plea of the 1 st defendant is false and thus cannot be accepted. The High Court has also referred to the order passed by the Income Tax Appellate Tribunal wherein the claim of 2 nd plaintiff for exemption of Rs.50,000 under the Income Tax Act, paid to 1 st defendant towards the remaining sale consideration was allowed in terms of section 54(F) of Income Tax Act11. The High Court has further found that the defendant has taken an inconsistent and contrary stand. The defendant was visiting 2 nd plaintiff all along insisting on obtaining Income Tax Clearance Certificate, which was postponed by the defendant No.1 on one pretext or the other. The consideration has been paid under the agreement dated 24.4.197912. The High Court has found that defendant No.1 has executed the agreement not only as power of attorney for his father but also as a son of late K. Basavaraja Urs. The stand of defendant No.1 is inconsistent. Defendant No.1, allowed the plaintiffs to put up the construction in the suit property. Thus, he was precluded from contending that he was not a party to the agreement. The High Court has also held that defendant No.1 has entered into the agreement and the entire consideration has been received, it is not considered appropriate to grant the liquidated damage or penalty for the breach of contract. The High Court has also held that the property was held by Princess Leelavathi, wife of late K. Basavaraja Urs, and after her death, the suit property devolved on late K. Basavaraj Urs and defendant No.1 under section 15 of Hindu Succession Act, 1956.

Court's reasoning:
16. The concurrent findings are recorded as to receipt of consideration and execution of the agreement to sell. There is no doubt about it that M.P. Chandrakanta Raj Urs (Plaintiff No.2) was earlier a counsel and legal advisor to K. Basavaraja Urs, but when the agreement had been executed, he was not a lawyer and became a Judge of the High Court. There are concurrent findings recorded concerning the execution of the agreement, and it has been rightly found established that signatures were not obtained on blank papers. There is concurrent finding recorded by the courts below that consideration has been paid. Thus, no case for interference is made out in the aforesaid findings17. The courts below have found that correspondence was made by defendants No.1 to obtain Income Tax clearance. The suit has been held not to be barred by limitation. Given the facts and material placed on record, no interference is called for with those findings also19. The statement of plaintiff No. 2 has been pointed out, indicating that he was aware that there were equal shares of K. Basavaraja Urs and K. B. Ramchandra Raj Urs (defendant No.1) in the property. Thus, plaintiff No.2 cannot plead that they were induced by erroneous belief while entering into agreement, by the conduct of defendant No.1. The plea of estoppel is, thus, not attracted. There is no proper foundation in the pleading regarding the plea of estoppel. The submission raised by learned counsel on behalf of respondent is that defendant No.1 acted as power of attorney holder of his father and received the sale consideration also. As such he is bound by the plea of estoppel to contend to the contraryA bare reading of the agreement described above makes it clear that agreement is between late K. Basavaraja Urs through power of attorney, K.B. Ramchandra Raj Urs. The Vendors is mentioned as K. Basavaraja Urs and not K.B. Ramchandra Raj Urs. Thus, it cannot be said that K.B. Ramchandra Raj Urs had executed the agreement on his behalf, concerning his share in the property. There is no whisper about the same in the agreement. The position mentioned above may indicate that plaintiffs were misled by the Power of Attorney holder that only late K. Basavaraja Urs was the exclusive owner of the property. When we consider the statement of M.P Chandrakanta Raj Urs (Plaintiff No.2), it clearly indicates that he was well aware of the fact that Princess Leelavathi owned the property and upon her death the property devolved upon, in equal shares and he was aware of the other sale deeds executed (Exhs. P 43, P-44, P-45, P-46). It is clear that plaintiff No.2 was aware as to the extant title of K.B. Ram Chandra Raj Urs in the property and also the fact that it was a joint family property. In the plaint, the plaintiffs have not taken the plea of estoppel, and now the case was set up that property had been sold by defendant No.1 in his capacity without any such plea in the plaint. Thus, plaintiff No.2 was well aware of the fact as to the title of K.B. Ramchandra Raj Urs in the property and that late K. Basavaraja Urs did not exclusively own the property21. The plea of estoppel in view the decision of this court in R.S. Madanappa (deceased) v. Chandramma & Anr., (supra) is not attracted, in which the Court has held that estoppel by conduct could not arise when a person concerned knew the right position relating to the title in property in his possession, he could not plead that he was induced to hold an erroneous belief because of the conduct of real owner of that property22. Thus, it is clear that there was no possibility of erroneous beliefs in the mind of the plaintiffs as to title position in the property. No doubt about it that defendant No.1 has acted as a power of attorney, but at the same time, did not act in his capacity as the owner of the property. The ownership of K.B. Ramchandra Raj Urs was known to the plaintiffs. In spite of that the plaintiffs have not set up the case to bind the share of K.B. Ramchandra Raj Urs. They have not pleaded in the plaint that K.B Ramchandra Raj Urs owned the property. There is no whisper as to the title of K.B. Ramchandra Raj Urs in the plaint. They needed to plead the facts to attract the plea of estoppel. That has not been done. Thus, the agreement which had been executed was not concerning share of defendant No.1, but of late K. Basavaraja Urs as his power of attorney.