AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
1996 (3) TMI 574
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....t-matter of Ext. A-1 agreement for sale dated 31st March 1994 executed between the Appellants on the one side and the Respondent on the other. The Appellants are executants 1 to 8 and the Respondent is the 9th executants in Ext. A-1. The plaint schedule contains twelve items of properties having a total extent of 961/2 cents in Survey No. 519 sub division No. 4D of Kalpetta Amsom Desom of Vythiri Taluk. The above properties were owned and possessed by the Appellants as per the registered assignment deeds obtained in the year 1986. They together executed Ext. A-1 agreement for sale in favour of the Respondent agreeing to sell the property absolutely for a total consideration of Rs. 25,00,000/-. Out of the above, Rs. 5 lakhs was paid as advance at the time of the execution of the agreement. It was agreed that the balance consideration of Rs. 20 lakhs would be paid by the Respondent in two installments, that is to say, first instalment of Rs. 10 lakhs would be paid on or before 30th June 1994 and the second on or before 31st August 1994. However, on 28th June 1994 the Respondent sent a registered lawyer notice to the Appellants stating that though he was ready to pay the balance consi....
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....rfeiture Act, 1964. Ext. A-6 contains two notifications. The first one relates to properties comprised in R.S. No. 519/3, and 519/4 (Patta 27, 157 and 262). The second notification relates to the properties comprised in R.S. No. 960/1A and 960/1B. In this case, we are concerned with the first notification, which is extracted below: KOZHIKODE DISTRICT Notices Under Section 5 of the Kerala Escheats and Forfeitures Act, 1964 (Act 4 of 1964) Ref. LB-35670/67 4^th February 1975 On enquiry under Section 4 of the Kerala Escheats and Forfeitures Act, 1964 (Act 4 of 1964) caused by the District Collector, Kozhikode it has been reported by the Tahsildar, Vythiri that on the death of Smt. Ponnan Kalliani, owner of Woodland Estate in Kalpetta Amsom Desom of S. Wynad Taluk described in the scheduled below, the patta of the land was transferred in the names of her children (1) Mr. John Fletcher and (2) Mr. Frank Fletcher and (3) Miss P.M. Fletcher as per F. Dis. 15/MTR/45-46, dated 23rd June 1945 of the Deputy Tahsildar, Vythiri. Miss P.M. Fletcher died on 28th July 1946 at her residence at Camp Bazar, Cannanore whereupon her name was deleted from the patta and the ....
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....ave thus become escheated and vested in the State Government in the year 1951 under the provisions of the above Act. The said notification also reveals that Smt. Ponnan Kalliani was the owner of the Woodland Estate in Kalpetta Amsom and the land was transferred in the names of her children, John Fletcher, Frank Fletcher and Miss P.M. Fletcher. Twelve items of properties proposed to be sold to the Respondent as contained in the schedule to Ext. A-1 are seen to be the properties forming part of Woodland Estate in respect of which the Appellants claimed to have obtained title as per the assignment deeds executed in the year 1986. 5. If the properties agreed to be sold as per Ext. A-1 form part of Woodlands Estate covered by Ext. A-6 notification, then the sale deeds executed in the year 1986 would be invalid, unless the manner of derivation of title is properly explained. The Appellants had shown that they have obtained the title in respect of the properties in view of the sale deeds executed in the year 1986. If the Appellants were aware of the above notification and the properties sought to be sold form part of the land involved in Ext. A-6, then of course it can be said that the....
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.... of the agreement. From the above facts and circumstances, I am persuaded to hold prima facie that the Appellants had conveniently suppressed the defective nature of the title of properties by the reason of Ext. A-6 proceedings from the notice of the Respondent at the time of execution of Ext. A-1. 6. The case put up by the Appellants in the counter-statement filed in I.A. 367 of 1995 has necessarily to be examined. Their case appears to be that they were not aware of the proceedings initiated by the Government of Kerala under the Kerala Escheats and Forfeitures Act in respect of the plaint schedule properties. According to them, they came to know of the proceedings long after the agreement of sale and only when reference was seen made in Ext. A-2 notice. It is their case that they have taken steps to move the Government to get the necessary permission to file their claim applications before the District Collector, Wynad to get the properties excluded from the escheat proceedings which is now pending. From the above pleading it would appear that the property proposed to be sold as per Ext. A-1 is part of the properties covered by Ext. A-6 notification issued in the year 1975. Th....
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.... 1 to 8 (Appellants) to 9th executants (Respondent) on the date of agreement itself. 9. The case of the Appellants is that handing over possession of the plaint schedule property arises only on execution of the sale deed after payment of the balance consideration. The case put up by them in the counter-statement is that they are in actual possession and enjoyment of the property and they continued in possession even after the execution of the agreement. Their specific case is thus: Subsequent recital in the agreement that possession was handed over to the Petitioner on the date of the agreement is inconsistent with the intention and category assertion in the agreement that possession would be handed over to the Petitioner only on completion of the execution of the sale deed and as such the subsequent recital regarding handing over of possession does not carry any meaning and that is to be ignored as actual possession continued to be with the Respondent. The question therefore is whether possession has been handed over to the Respondent on the date of execution of the agreement itself or delivery of possession has been adjourned till the execution of the sale deed after payment o....
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....nd F. 194 at page 243]. This principle is in consonance with the maxim "Ut res magis valeat quam pereat". (It is better for thing to have effect than to be made void). 11. On behalf of the Appellants, it was pointed out that there is ambiguity in the recitals contained in the two clauses of Ext. A-1 under consideration. Therefore, it is essential to consider as to how the court will ascertain the ambiguity if any, in the recitals of an instrument. While reading the instrument as a whole, if the recitals are found to be clear and forthright it cannot be said that there is ambiguity in the recitals. On the other hand if the recitals are not clear and afford doubts as to its true effects the ambiguity may be inferred. If the recitals are clear and unambiguous, the effect shall be given to them in entirety and there is no scope for hypothetical considerations. While, so examining the recitals contained in different clauses of an instrument the intentions of the parties are not relevant. What is relevant is the intention of the recitals. Lord Devlin in Davies v. Elsby Brothers Ltd. (1961) 1 W.L.R. 170 said: In English law as a general principle the question is not what the w....
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....n to 9th executants by executants 1 to 8 on the date of agreement itself. (This is the clause referred to above as 'latter clause'). The sixth clause stipulates that both parties shall perform their part of the contract within the time allowed and in this no default shall be committed under any circumstances. 13. A reading of the above clauses would sufficiently brings forth that recitals therein are clear and forthright and do not create any sort of doubt or uncertainty in the mind of an ordinary man capable of reasoning. This is particularly true in the case of 'former clause' as well as the 'latter clause'. The intentions of both these clauses are clear and explicit. There is no ambiguity or repugnancy between these two clauses and therefore the effect shall be given to them in entirety. 14. The 'former clause' speaks of the handing over of possession by the Appellants in favour of the Respondent or his nominee on registration of the sale deed consequent on the payment of the balance consideration of Rs. 10 lakhs. What is contemplated under this clause is the final handing over of possession by the Appellants on registration of the sale deed....
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....sent case, I have already found that there is no ambiguity or inconsistency between the 'former' and the 'latter' clauses. 16. The Privy Council in Fozbes v. Qit and Ors. A.I.R. 1921 P.C. 209 has laid down the principle of law to be applied in this behalf as thus: If in a deed an earlier clause is followed by a latter clause which destroys altogether the obligation created by the earlier clause, the latter clause is to be rejected as repugnant, and the earlier clause prevails. That was a case where two clauses cannot be reconciled. Lord Wrenbury further said: But if the latter clause does not destroy, but only qualifies the earlier, then the two are to be read together and effect is to be given to the intention of the parties as disclosed by the deed as a whole. In Commissioner of Agrl. Income Tax v. Naravath Lakshmi Amma I.L.R. 1974 Ker 539 a Division Bench of this Court also adopted the rule that the recital in an earlier clause shall prevail over the one in the latter clause while interpreting a gift deed. That was also a case where there was repugnancy in the recitals. This would be evident from the following observations contained in ....
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.... any material defect in the property or in the seller's title thereto of which the seller is and the buyer is not aware and which the buyer could not with ordinary care discover. The Appellants are therefore bound to explain the defective nature of their title alleged by the Respondent in view of Ext. A-6 notification. What is alleged is a material defect in the Appellants' title of which the seller is aware at the time of execution of Ext. A-1 agreement, in view of what I have said above. This is a defect which the Respondent could not with ordinary care discover. Therefore, Section 55(1)(a) of the Act squarely applies. The Appellants in spite of Exts. A-2 and A-3 notices did not explain the defect satisfactorily. The stand adopted by the Appellants in the suit is not that they have no title but they will file claim petitions before the Government so as to clear the title. It was the continued silence of the Appellants after the receipt of Exts. A-2 and A-3 notices alleging the defective title, which prompted the Respondent to file the suit for injunction. In other words, the failure to perform the obligation of the seller under Section 55(1)(a) is the root cause for the s....
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....etionary power under Sub-rule (2) of Rule 2 of Order 39 Code of Civil Procedure. I reasonably feel in the interest of justice, that the rights of the Appellants shall be safeguarded by directing the Respondent to furnish security to the balance sale consideration of Rs. 20 lakhs within a specified time. I am fortified in doing so in view of the continued assertion of the Respondent that he was ready and willing to perform his part of the terms of Ext. A-1 agreement. Accordingly, I direct the Respondent to keep the aforesaid amount in Fixed Deposit under the account of the court below in a nationalised Bank in two installments and produce the Fixed Deposit Receipt before the said court. The first instalment of Rs. 10 lakhs shall be so deposited on or before 12th April 1996 and the second instalment of remaining Rs. 10 lakhs on or before 31st May 1996. 22. In view of the peculiar circumstances of the case, I think it would be in the interest of all concerned if I give a direction to the court below to dispose of the suit O.S. No. 1 of 1995 as expeditiously as possible at any rate within a period of six months from today. Therefore, there will be a direction as above. The Civil Mis....