1956 (4) TMI 57 - SC - Indian Laws

Court confirms extinguishment of title under Section 52 Transfer of Property Act, dismisses appeal, rejects adverse possession claim

NAGUBAI AMMAL & OTHERS Versus B. SHAMA RAO & OTHERS.

NAGUBAI AMMAL & OTHERS Versus B. SHAMA RAO & OTHERS. - 1956 AIR 593, 1956 SCR 451 Issues Involved:1. Title to Property and Lis Pendens2. Collusive and Fraudulent Proceedings3. Effect of Adjudication in Insolvency on Property Sales4. Limitation and Adverse PossessionDetailed Analysis:1. Title to Property and Lis PendensThe core issue was whether the sale deed dated 30-1-1920 was subject to the rule of lis pendens under Section 52 of the Transfer of Property Act due to the sale dated 2-8-1928 in execution of a decree in O.S. No. 100 of 1919-20. The court held that since the plaint in O.S. No. 100 of 1919-20 was presented on 6-6-1919, the sale to Dr. Nanjunda Rao on 30-1-1920 fell within the mischief of Section 52 and was thus affected by the purchase by Devamma on 2-8-1928. The court rejected the argument that the plea of lis pendens was not open to the plaintiff due to lack of specific pleading, as the defendants had full knowledge and opportunity to address this issue during the trial.2. Collusive and Fraudulent ProceedingsThe appellants contended that the proceedings in O.S. No. 100 of 1919-20 and the subsequent sale were collusive. The court examined various statements and admissions made by Abdul Huq, his legal representatives, and the plaintiff but concluded that these suggested the proceedings were fraudulent rather than collusive. The court distinguished between collusion and fraud, noting that collusion implies a sham contest while fraud involves a real contest but with deceitful intentions. The court affirmed the findings of the lower courts that the proceedings were not collusive, supported by the bona fide nature of the maintenance suits, the contested litigation, and the prolonged execution process.3. Effect of Adjudication in Insolvency on Property SalesThe appellants argued that the purchase by Devamma was void because the Official Receiver, in whom the estate of Keshavananda had vested upon his adjudication as an insolvent, was not a party to the sale proceedings. The court held that since the properties were transferred by the mortgagor long before the insolvency proceedings, they did not vest in the Official Receiver. Even if the Official Receiver had an interest, his non-joinder did not render the sale a nullity. The court cited the principle that a sale in a defectively constituted mortgage suit is valid against parties to the action and can only be challenged by the Official Receiver, who did not do so in this case.4. Limitation and Adverse PossessionThe appellants also claimed that the suit was barred by limitation and that they had acquired title by adverse possession. The District Judge found in favor of the plaintiff, establishing possession within 12 years of the suit and rejecting the claim of adverse possession. The High Court did not discuss this issue, implying it was abandoned by the appellants. The court noted that adverse possession against a purchaser under a mortgage sale cannot commence before the date of the sale, and the suit was filed within 12 years of the sale in 1936.ConclusionThe court dismissed the appeal, confirming that the title of the appellants was extinguished under Section 52 of the Transfer of Property Act by the court sale dated 2-8-1928. The suit was not barred by limitation, and the appellants' claims of adverse possession and collusive proceedings were rejected. The appeal was dismissed with costs.