1967 (8) TMI 135 - HC - Indian Laws

Appeal Dismissed: Sale Deed Upheld as Valid, Not Sham or Nominal; Suit Within Limitation, Possession Unproven.

Mulakalapalli Pullayya Versus Chalamala Guravayya

The HC dismissed the plaintiffs' appeal, affirming that the sale deed was not a sham and nominal transaction, and the suit was within limitation. The ... - Issues Involved:1. Whether the sale deed (Exhibit B-1) was a sham and nominal transaction.2. Whether the suit was barred by limitation.3. Whether the plaintiffs were in possession of the suit property at the time of filing the suit.4. Whether the plaintiffs' suit for a mere declaration was maintainable.5. Whether the plaintiffs were estopped from filing the suit.6. Whether the defendant had perfected his title by adverse possession.Detailed Analysis:1. Sham and Nominal Transaction:- The plaintiffs argued that the sale deed executed on January 19, 1945, was a sham and nominal transaction without any consideration, intended to protect the property from being wasted by the second plaintiff. They claimed that the property was worth Rs. 5,000, but was nominally conveyed for Rs. 2,000 to the defendant, who was never in possession or enjoyment of the property.- The trial court initially found the sale deed to be a nominal and sham transaction, not supported by consideration. However, upon appeal, the High Court disagreed, holding that the sale deed was supported by consideration and not a sham transaction. The court emphasized the distinction between a benami transaction and a sham transaction, citing the Supreme Court's clarification that a sham transaction involves no operative transfer of title, whereas a benami transaction does.2. Limitation:- The defendant contended that the suit was barred by limitation, as it was filed more than three years after the execution of the sale deed, invoking Article 91 of the Limitation Act.- The High Court held that Article 91, which applies to voidable transactions requiring cancellation, was not applicable since the plaintiffs alleged the transaction was void as a sham and nominal. Thus, the suit was within limitation.3. Possession:- The trial court found that the plaintiffs were not in possession of the suit property at the time of filing the suit, which initially led to the dismissal of the suit for mere declaration.- Upon remand, the High Court allowed the amendment of the plaint to include a prayer for possession. The court found that the defendant had obtained possession of the land upon execution of the sale deed, contrary to the plaintiffs' claims.4. Maintainability of the Suit for Declaration:- The trial court dismissed the suit for being a mere declaration without possession. However, after the amendment to include possession, the High Court found the suit maintainable.5. Estoppel:- The trial court found that the plaintiffs were not estopped from filing the suit, a finding with which the High Court agreed. The defendant's actions and the circumstances did not preclude the plaintiffs from challenging the transaction.6. Adverse Possession:- After the remand, the defendant claimed to have perfected his title by adverse possession for over 12 years. However, the High Court found that the question of adverse possession did not arise, as the amendment related back to the date of the original petition, negating the defendant's claim.In conclusion, the High Court dismissed the plaintiffs' appeal, holding that the sale deed was not a sham and nominal transaction, the suit was within limitation, and the plaintiffs failed to prove their possession or the nominal nature of the transaction. The court's decision was based on a thorough examination of the evidence and legal principles, ultimately upholding the validity of the sale deed.