IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO.4723 OF 2002

Arumaraj Devadhas … Appellant

Vs.

K.Sundaram Nadar (D) by LRs. & Ors. … Respondents

O R D E R

This appeal by special leave is filed by the third defendant in a  

suit  for  declaration  of  title  and  possession,  and  consequential  

permanent  injunction  (OS  No.110/1979  on  the  file  of  Additional  

District Munsiff, Kuzhithurai) filed by the first respondent herein (of  

whom respondents 2 to 11 herein are the LRs.). Defendants 1,2,4 and  

5 in the  said suit  are  respectively  respondent  Nos.12,13,14 and 15  

herein. Respondents 3,12,13 and 15 have been subsequently deleted  

by the appellant at his own risk. For convenience, we will refer to the  

parties by their ranks in the suit.

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2. The first defendant (Karunakaran Nadar) sold the suit property  

(an  extent  of  14  cents  in  Survey  No.1817  from  out  of  several  

properties  allotted  to  him  at  a  family  partition)  to  the  second  

defendant  (Solomon  Nadar)  under  a  registered  Sale  Deed  dated  

1.8.1946.  The  second  defendant  executed  a  Deed  of  Possessory  

Mortgage dated 16.1.1947 in favour of  one Syeed Kannu. Plaintiff  

alleged that the said mortgage was not redeemed and Syeed Kannu  

became the absolute owner thereof, and on his death the suit land was  

inherited by his son Mohammed Ali. The said Mohammed Ali sold  

the suit property to the plaintiff (Sundaram Nadar) under registered  

Sale Deed dated 23.12.1978. Plaintiff, thus, claims to be the owner in  

possession of the suit property. As the defendants were attempting to  

interfere with his possession and raise a cloud over his title, he filed  

the said suit.  

3. Defendants 1 and 4 remained exparte. Defendant No.2 claimed  

that he was not a necessary party to the suit. He however confirmed  

that  he  had  purchased  the  suit  property  from  first  defendant  on  

1.8.1946  and  he  had  mortgaged  the  said  land  with  possession  in  

favour of  Syeed Kannu.  The third  defendant  (the appellant  herein)  

contested the suit. He contended that the sale by the first defendant in  

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favour of the second defendant on 1.8.1946 was sham and nominal.  

According to him, first  defendant  sold 10 cents  out  of the said 14  

cents  in  Survey  No.1817  in  favour  of  one  Dasan  Nadar  under  

registered  Sale  Deed  dated  22.5.1953.  Before  such  sale,  the  first  

defendant also mortgaged the very same 14 cents of land in favour of  

one Mohammed Haneefa on 16.2.1953. The said Muhammed Haneefa  

assigned  the  mortgage  in  favour  of  the  second  defendant  on  

27.4.1964. The second defendant executed a Release Deed in favour  

of Dasan Nadar in regard to 10 cents purchased by him, under Deed of  

Release dated 1.8.1966 and thus Dasan Nadar became absolute owner  

of  10  cents.  Dasan  Nadar  had  also  purchased  another  2  cents  in  

Survey No.1817 under Sale  Deed dated 1.8.1966 executed by first  

defendant  and  his  wife  Ammukutty.  The  said  two  cents  of  land  

comprised a residential house where first defendant and Ammukutty  

were staying and Dasan Nadar filed an eviction suit against them and  

obtained possession of the said house under decree dated 21.9.1974.  

The said Dasan Nadar thus became the owner in possession of  12  

cents of land in Sy.No.1817 and he executed a Deed of Sale dated  

22.8.1977 in favour of the third defendant and thus the third defendant  

became the absolute  owner  in  possession of  12 cents  of  land.  The  

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third  defendant  contended that  as  the  Sale  Deed dated  1.8.1946 in  

favour of second defendant being sham and nominal was void, the  

mortgage by second defendant in favour of Syeed Kannu and sale by  

Syeed Kannu’s son in favour of plaintiff were also void and invalid.  

The third defendant therefore sought dismissal of the suit.

4. The trial Court, by its judgment dated 23.8.1982 held that once  

first  defendant  had  sold  the  14  cents  of  land  in  favour  of  second  

defendant under Sale Deed dated 1.8.1946, the first defendant had no  

right, title or other interest in the suit property and consequently the  

several  subsequent  transactions  relating  to  suit  property  by  first  

defendant,  that  is  the  mortgage  dated  16.2.1953  in  favour  of  

Muhammed  Haneefa,  the  sale  dated  22.5.1953 in  favour  of  Dasan  

Nadar  as  also  another  Sale  dated  9.7.1955  in  favour  of  one  

Gopalakrishna Pillai were all ineffective and invalid. The Trial Court  

held that plaintiff has established his title with reference to the said  

sale  dated  1.8.1946  in  favour  of  second  defendant,  and  thereafter  

second defendant to Syeed Kannu and Syeed Kannu’s son to plaintiff.  

It, therefore, decreed the suit as prayed. Feeling aggrieved, the third  

defendant filed an appeal. The first appellate court allowed the appeal  

by judgment dated 14.3.1984. It accepted the contention of the third  

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defendant that the Sale Deed dated 1.8.1946 was sham and nominal  

for three reasons which we will refer to a little later. As a consequence  

of its finding that the Sale Deed dated 1.8.1946 by Karunakaran Nadar  

(first defendant) in favour of Solomon (second defendant) was sham  

and  nominal,  it  held  that  the  subsequent  transfers  from  second  

defendant to Syeed Kannu and Syeed Kannu’s son to plaintiff were  

invalid. The first appellate court also held that the third defendant had  

made  out  his  title  on  the  basis  of  the  Sale  Deed  dated  22.5.1953  

executed by first defendant in favour of Dasan Nadar in regard to 10  

cents  of  land,  and the  Sale  Deed dated  1.8.1966 executed  by  first  

defendant  and his wife in favour of Dasan Nadar in regard to two  

cents  and the  consequential  sale  by Dasan Nadar  in  his  favour  on  

22.8.1977.   It,  therefore,  reversed  the decree  of  the  trial  court  and  

dismissed the suit.

5. Feeling aggrieved, the plaintiff filed a second appeal. The High  

Court allowed the second appeal. It found that the three reasons given  

by the first appellate court to hold that the Sale Deed dated 1.8.1946  

was  sham  and  nominal  were  erroneous  and  the  Sale  Deed  dated  

1.8.1946 was valid and binding; and if so, the title of the plaintiff was  

made out and the third defendant could not claim any title on the basis  

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of documents executed by first defendant subsequent to the sale dated  

1.8.1946.  The  Second  Appeal  was,  therefore,  allowed  and  the  

judgment of the trial court was restored. The said judgment is under  

challenge in this appeal.         

6. The question that  arises  for  our  consideration is  whether  the  

High Court was justified in reversing the finding of fact that the Sale  

Deed dated 1.8.1946 executed by first defendant in favour of second  

defendant was sham and nominal. This requires a brief examination of  

the three reasons given by the first appellate court to hold the sale  

deed dated 1.8.1946 to be sham and nominal.  

Reason (i) : The  first  defendant  had  executed  a  Sale  Deed  dated  9.7.1955  in  regard  to  the  very  same  land  in  favour  of  one  Gopalakrishna Pillai.  That  sale  was challenged by first  defendant’s  minor son represented by his mother Ammukutty in O.S.No.701/1955.  In that suit Solomon Nadar (the second defendant) was arrayed as the  fourth defendant as he had been described as a mortgagee in the sale  deed  dated  9.7.1955.  The  said  suit  was  decreed  ex-parte  and  in  execution of the said ex-parte decree possession of the property was  given to Ammukutty representing her minor son through a delivery  receipt.  Therefore,  it  has  to  be  inferred  that  second defendant  was  never in possession in pursuance of the sale deed dated 1.8.1946.

The High Court has rightly explained how this finding is without any  

basis  and  contrary  to  the  facts.  Firstly,  in  O.S.No.701/1955,  

possession  was not  sought  from second defendant.  Possession was  

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sought  from  Gopalakrishna  Pillai.  After  the  sale  of  the  schedule  

property and delivery of possession to second defendant under deed  

dated 1.8.1946, obviously the question of Gopalakrishna Pillai having  

possession  of  the  said  land  did  not  arise.  Further,  even  second  

defendant did not continue to have possession, as he had mortgaged  

the  suit  property  with  possession  in  favour  of  Syeed  Kannu  on  

16.1.1946.   Syeed  Kannu  was  not  a  party  to  the  said  suit  against  

Gopalakrishna  Pillai.  The  said  defendant  did  not  contest  the  suit.  

Therefore,  if paper possession was shown to have been taken from  

Gopalakrishna Pillai in pursuance of an ex parte decree against him,  

that cannot be said to be proof of second defendant not being put in  

possession  of  the  suit  property  under  Sale  Deed  dated  1.8.1946.  

Therefore, neither the suit filed by first defendant’s minor son against  

Gopalakrishna Pillai, nor the delivery receipt executed therein would  

in any way affect the title or possession of second defendant or his  

transferee Syeed Kannu or the plaintiff who was the transferee from  

Syeed Kannu’s son.

Reason  (ii) :  After  execution  of  the  Sale  Deed  dated  1.8.1946  in  favour of second defendant, first defendant had mortgaged the very  same land in favour of Muhammed Haneefa.  Second defendant had  taken an assignment of the said mortgage from Muhammed Haneefa  under the Assignment Deed dated 27.4.1964. If the second defendant  

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was already the owner in pursuance of the Sale Deed dated 1.8.1946,  there was no need for him to take the assignment  of a subsequent  mortgage. Therefore it has to be inferred that the earlier Sale Deed  dated 1.8.1946 in favour of second defendant was treated by second  defendant as being sham and nominal and in view of it, the second  defendant took an assignment of the said mortgage on 27.4.1964.  

But what was lost sight of by the first appellate court was the fact that  

the Sale Deed dated 1.8.1946 in favour of second defendant related to  

10 cents in Survey No.1865, 17 cents in Survey No.1817 and 12 cents  

in Survey No.2142 and 10 cents in Survey No.1869. The Assignment  

of Mortgage dated 27.4.1964, on the other hand, relates to as many as  

sixteen properties. It is possible that second defendant was interested  

in taking the assignment because of the mortgage was in respect of  

several other properties. It is also possible that while mortgaging the  

properties  in  favour  of  Muhammed  Haneefa,  first  defendant  had  

inadvertently included the properties which were already sold under  

deed dated 1.8.1946. It is also possible that second defendant did not  

want any dispute or litigation with Muhammed Haneefa and therefore  

took an assignment. What is relevant for our purpose is that the mere  

fact that second defendant had taken an Assignment of the mortgage  

from Haneefa, cannot be considered as a circumstance to hold that the  

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Sale Deed dated 1.8.1946 in favour of second defendant was sham  

and nominal.

Reason (iii) : The first defendant and his wife Ammukutty sold two  cents in Sy.No.1817 in favour of Dasan Nadar. He thereafter filed an  eviction  suit  against  first  defendant  and  Ammukutty  and  took  possession from them. This showed that first defendant did not deliver  possession to second defendant when he executed the sale deed dated  1.8.1946.  

It is evident from the decree in O.S.No.251/1970 (Eviction Suit) that  

the suit related to a house which was situated in two cents of land. On  

the other hand, the suit property, that is 14 cents in Survey No.1817,  

did  not  relate  to  any  house  property  at  all,  but  vacant  land.  

Sy.No.1817 was a large extent of land and what was sold by the first  

defendant  to second defendant under sale  deed dated 1.8.1946 was  

only  a  small  portion  of  14  cents.  It  was  quite  possible  that  first  

defendant had continued to own and possess a house in some portion  

of Survey No.1817 which was not the subject matter of the Sale Deed  

dated 1.8.1946. Therefore, it is not possible to link the house sold in  

favour of Dasan Nadar, with the land sold under the sale deed dated  

1.8.1946.  

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7. At all events, the fact that after executing the Sale Deed dated  

1.8.1946  in  favour  of  second  defendant,  first  defendant  went  on  

executing different Deeds namely a Mortgage Deed dated 16.2.1953,  

Sale  Deed  dated  22.5.1953  and  Sale  Deed  dated  9.7.1955  are  not  

indications that the first Sale Deed was sham and nominal, but were  

indications  that  first  defendant  was  an  unreliable  an  unscrupulous  

person. Further the fact that the second defendant had mortgaged the  

suit  property  (purchased  by  him  on  1.8.1946)  with  possession  to  

Syeed Kannu on 16.1.1947 shows that the deed dated 1.8.1946 was  

not sham and nominal, but real and acted upon. The said sale has not  

been  declared  as  sham  and  nominal  in  any  proceedings.  In  this  

background,  the  inference  that  sale  in  favour  of  second  defendant  

under deed dated 1.8.1946 was sham and nominal, was unwarranted.

8. The High Court has focussed on the crucial issue and concluded  

that  the  findings  of  the  first  appellate  court  that  the  Deed  dated  

1.8.1946 is sham and nominal, was an unwarranted inference without  

any basis. Consequently, it rightly interfered with the said finding.  

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We, therefore, find no reason to interfere with the judgment of the  

High Court. Appeal is dismissed.

…………………………J. (R V Raveendran)

New Delhi; ………………………..J. April 16, 2009. (H.L.Dattu)     

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