Section 51 of the Transfer of Property Act reads as follows. " 51. Improvements made by bona fide holders under defective titles - When the transferee of immoveable property makes any improvement on the property, believing in good faith that he is absolutely entitled thereto, and he subsequently is evicted therefrom by any person having a better title, the transferee has a right to require the person causing the eviction either to have the value of the improvement estimated and paid or secured to the transferee, or to sell interest in the property to the transferee at the then market value thereof, irrespective of the value of such improvement. The amount to be paid or secured in respect of such improvement shall be the estimated value thereof at the time of eviction. When, under the circumstances aforesaid, the transferee has planted or shown on the property crops which are growing when he is evicted therefrom, he is entitled to such crops and to free ingress and egress to gather and carry them." But in the present case, the relationship between the parties, the entrustment of the property to the management of the first defendant by the plaintiff apart from handing over title deed Ex.A.1 to her, acquiescence by the plaintiff to the constructions made by the 1st defendant in the property and collection of rents by her and other circumstanceessuggest that the 1st defendant was under the bonafide belief that she was the owner of the property, and that there was relinquishment in her favour by the plaintiff and his father in return for financial support given to the plaintiff by the first defendant and her husband by shifting from Kakinada to Peddapuram. So it can be said that the improvements were made in good faith by D.1 believing that she is the absolute owner of the property. So the said decision in NANDKISHORE ( 1 supra ) does not apply to the facts of the present case.

THE HON'BLE SRI JUSTICE M.S. RAMACHANDRA RAO          

AS NO.324 OF 1994  

25-9-2012

Mudapaka Malleswarao ( died per LRs.)          

Chenchbinada Satyavathi and others

Counsel for the Petitioner:  Sri A. Raja Sekhara Reddy.

Counsel for Respondents:

<Gist :

>Head Note:

? Cases referred:

Judgment:
        This appeal is filed by the plaintiff in O.S.No.25 of 1986 on the file of
the Court of the Subordinate Judge, Peddapuram against the judgment and decree
dated 29-9-1993 passed by the said Court.
        Defendant No.1 is the elder sister of the plaintiff, defendant no.2 is the
daughter of defendant 1 and defendants 3 to 5 are the grand sons of D.1.
        The suit was filed by the plaintiff to declare his title to the plaint A
and B Schedule property, for possession of the same after evicting the
defendants therefrom, to direct the defendants 1 and 2 to render account of ( a)
the amount of Rs.500/- received by defendant no.1 in respect of the plaint C
schedule property ; (b)  for the amount allegedly sent by the plaintiff to the
defendant no.1; (c)  for the income of the plaint A and B Schedule property; (d)
for payment of the amounts so found due to the plaintiff together with interest
at 12 1/2 % per annum from the due dates till the date of payment; (e)  for a
permanent injunction restraining the defendants 1 and 2 from ever demanding and
collecting the rents from the defendants 3 to 16; (f) for a permanent injunction
restraining the defendants 3 to 16 from ever paying the rents to the defendants
1 and 2 but depositing the same into court and (g)  also for determination of
mesne profits for the unauthorized occupation of item 2 plaint A and B schedule
properties for the  3 years prior to the suit i.e. 1983-84 to 1985-86 by the
defendants 1 and 2 and together with interest and for costs of the suit.
        The plaintiff's case is that he got the plaint A and C schedule properties
in the partition with his joint family members under registered partition deed
dated 16-2-1956, that the first defendant is his sister and her husband was a
Gold Smith, that he had no property and no income and they were finding it
difficult to make ends meet, that they were living in a rented house, that the
plaintiff was sending money now and then, that the plaintiff was working as an
Engineer in R & B Department and was subjected to transfers from place to place
and that the first defendant  and her husband being in strained circumstances
requested the plaintiff to permit them to live in the house in the plaint A
schedule property free of rent and in return they agreed to manage plaint A and
C schedule properties on behalf of the plaintiff. The plaintiff contended that
he agreed to the said suggestion and entrusted plaint A and C schedule
properties to them on condition that they  should hand them over to him whenever
required by him, that he also handed over Ex.A.1 to the first defendant to be
shown to the officers and staff of the Peddapuram Municipality whenever required
in connection with the exchange of sites in Items 1 to 3 of the plaint A
schedule property and the purchase of plaint C schedule property and that during
that sale transaction, the documents remained with the first defendant. He
contended  that the first defendant and  her husband later suggested to the
plaintiff that it would give good dividends if some money was invested and some
new houses were constructed in the plaint A Schedule and rented out, that the
plaintiff liked the idea and sent them huge amounts off and on amounting to
Rs.25,000/- in all between 1956 and 1970 for improvements of the then existing
house and for construction of new houses in the plaint A schedule property, and
on the basis of the said investments made by the plaintiff, the original
thatched house in item no.1 of the plaint A schedule was converted by the first
defendant and her husband into a Mangalore tiled house, that they extended the
adjacent thatched house, that they constructed two Mangalore tiled houses in
item 2 of the plaint A schedule, one Mangalore tiled house with a furnace for
melting tin and a thatched house adjacent and thatched cattle shed opposite to
item 3 of the plaint A schedule property and that the plaintiff had supplied
wooden rafters, doors, windows, doorways and almyrahs which he had got for his
share in the partition for being used in the said constructions.        The plaintiff
contended that the first defendant and her husband were leasing out the several
houses mentioned above and were realizing rents, apart from leasing out the
portion of the vacant site in plaint A schedule property,  that D.3 to D.16 are
the tenants in occupation of the plaint A schedule, that the first defendant and
her husband suggested to the plaintiff to sell away the plaint C schedule
property because it was aloof and useless, that the first defendant found a
purchaser for the said property,  that the plaintiff executed a sale deed Ex.A.4
dated 12.6.1964 in favour of the purchaser and got executed the special power of
attorney Ex.A.28 dated 24-6-1964 in favour of the first defendant to attend to
the registration of the sale deed and to receive the sale consideration on
behalf of the plaintiff and admit the execution of the sale deed before the Sub
Registrar.  The plaintiff alleged that the first defendant  attended to the
registration of the sale deed and received the sale consideration of Rs.500/-
and kept that money with her.   The plaintiff also alleged that D.1 had
purchased the portion of the plaint B schedule house in her name for Rs.1000/-
under Ex.B.8 dated 13-8-1965 and other portion in the name of her daughter- 2nd
defendant for Rs.1,500/- on 9.11.1970 with the plaintiff's money benami for the
plaintiff and for his benefit and as such the plaintiff is the real owner of the
plaint B schedule house.  He also contended that the first defendant or her
husband or the 2nd defendant had no wherewithal either to improve the original A
schedule property or to construct new houses in it or to purchase the B schedule
house and that they had done all that with the plaintiff's money only.  He
further alleged that first defendant's husband died in the year 1978 and
thereafter the first defendant alone was managing the plaint A Schedule
property, that the first defendant stopped remitting the rent collections to the
plaintiff from 1982 on some pretext or other and that gave rise to suspicion in
the mind of the plaintiff about the first defendant's bona fides and that he
asked the first defendant and also defendant no. 2 to deliver the vacant
possession of the plaint A and B schedule properties to him and render accounts
to him for his moneys. He alleged that defendants 1 and 2 evaded to comply with
the plaintiff's request and thereafter he got issued a legal notice Ex.A.2 dated
26-9-1984 to the first defendant to which she sent a reply Ex.A.3 dated
5.11.1983 with false and untenable allegations claiming title by virtue of the
alleged oral relinquishment which was not proved and valid in law and therefore
he is entitled to plaint A and B schedule properties and income therefrom and to
account for his moneys.
        D.1 and 2 filed written statement denying the plaint averments. It is
contended by D.1 and D.2 that the parties belong to Goldsmith community, that
wife of the plaintiff being a spend thrift woman, the plaintiff himself was
unable to make both ends  meet  with his salary as a Engineer in the R & B
Department, that the properties were improved by D.1 and her husband by
converting and extending constructions from time to time and that it is
incorrect to state that the plaintiff had advanced money to her. It is also
contended that the plaintiff was not a person belonging to a well to do family,
that his father was unable to educate him, that her husband was wealthy man
having property at  Jagannayakapura of Kakinada and landed property at
Kadakuduru village, that father of the first defendant and the plaintiff
requested the first defendant's husband to go over to Peddapuram to look after
him, that her husband went to Peddapuram worked there as Goldsmith and earned
money, that she and her husband got the plaintiff educated by selling their
property and by spending their earnings, that she also worked and helped her
husband in Goldsmith work, that the plaintiff and his father out of gratitude
left the property to the plaintiff and her husband and in the year 1956, the
original partition deed was handed over to the plaintiff evidencing the
relinquishment in the presence of Mudapaka Baburao and Mudapaka Venkatrao. They  
further contended that ever since, the first defendant and her husband were
enjoying in their own right, that the first defendant  improved the same in her
name with her and her husband's money only, that she and her husband enjoyed
plaint A Schedule property to the knowledge of one and all including plaintiff
openly and uninterruptedly and therefore she had perfected her title even by
adverse possession. They contended that the suit is liable to be dismissed on
the said ground. D.1 also contended that the plaintiff attempted to take
possession highhandedly in 1983, that the first defendant got issued notice for
which the plaintiff kept quiet and that the plaint schedule properties are self
acquired properties of the D.1 and D.2.         She also contended that D.1 and her
husband never acted on behalf of the plaintiff nor paid any rents to him at any
time. She contended that she is an old and helpless woman, that the plaintiff
wanted to take possession highhandedly and when it was resisted, he colluded
with Municipal Authorities and got his name entered in the registers and got
filed the suit.  She also contended that D.6 to D.13 are residing in the
portions of the plaint schedule properties, that she is receiving the rent of
Rs.280/- per month as a rent and this is not even sufficient for  maintenance of
herself and of the suit properties and that D.6 to D.13 were unnecessarily added
as parties and the suit should be dismissed.
        D.3 to D.13 adopted the written statement of D.1 and D.2.  D.14 and D.16
remained ex-parte. D.15 contended that he has purchased vacant site of 100
square yards from Rali Prasadarao and his sons by a sale deed dated 3.5.1978,
that the said site was situated in Golivari street of Peddapuram, that the
plaintiff was never in possession of the said property either by himself or
through the first defendant at any point of time and that the plaintiff had no
title or possession to the said site purchased by D.15.
        On the basis of the rival claims, appropriate issues were framed in the
suit. In support of his case the plaintiff examined P.Ws. 1 to 5 and marked
Exs.A.1 to A.29.  The defendants examined D.Ws. 1 to 3 and marked Exs.B.1 to
B.42.  Exs.X1 to X.9 are marked through a 3rd party.
        After considering the oral and documentary evidence on record, the trial
Court held that the plaintiff is entitled for declaration that he is the owner
of the plaint A schedule property only, that he should pay the first defendant
the compensation for the construction of the buildings in items 1 to 3 of the
plaint A Schedule as estimated by the Executive Engineer, Respondent & B 
Department, and only on deposit of the said compensation amount into the Court,
he should be entitled to the recovery of the plaint A schedule property. It
dismissed the rest of the suit claim.  Aggrieved thereby, the plaintiff has
filed this appeal.
        Heard Sri A. Rajasekhara Reddy, learned counsel for the plaintiff-
appellant and Sri M.S.R. Subramanyam, learned counsel for the defendants-
respondents 1 and 2.
        Sri A. Rajasekhara Reddy, learned counsel for the appellant contended that
the judgment of the trial Court insofar as the trial Judge dismissed the claim
of the plaintiff as regards B schedule property, denied the relief of accounting
and permanent injunction and mense profits and granted relief of compensation to
D.1 for construction of buildings  in items 1 to 3 of the plaint A schedule
property is erroneous. He also contended that the trial Court erred in directing
that the plaintiff can recover possession of the plaint A schedule property only
on condition that he deposits the compensation amount as assessed by the
Executive Engineer, R & B Department for the value of the constructions made in
items 1 to 3 of the plaint A schedule property by the first defendant.   He also
contended that once the property was held to belong to the plaintiff, the
constructions made on it automatically belong to the plaintiff when there is no
evidence  that the first defendant had constructed any buildings in the A
schedule property with her money.  He also contended that the provisions of
Benami Transaction (Prohibition) Act 1988 are not applicable in respect of the B
schedule property when there is ample oral and documentary evidence that the
plaintiff had got the plaint schedule properties in partition with his joint
family under registered partition deed Ex.A.1 dated 16.2.1956. The learned
counsel for the appellant in support of his contentions  has relied on the
decision reported in NAND KISHORE AND ANOTHER V. NARIAN AND OTHERS 1 and  prayed          
that the appeal be allowed and the entire claim in the plaint as prayed for be
decreed.      
        Per contra, Sri MSR Subramanyam, learned counsel for the defendants 1 and
2 supported the judgment of the trial Court and prayed that the appeal be
dismissed.
        I have considered the oral and documentary evidence available on record
and the submissions made by the learned counsel for the appellant and the
respondents.
        The plaintiff  examined himself as P.W.1 and he narrated about his case.
He admitted that he was still a student  by the time the first defendant  and
her husband had shifted to Peddapuram at the time when his mother was unwell,
that six months thereafter his mother died and that the first defendant and her
husband continued to live in Peddapuram. He also stated that he cannot state
when and what amounts he had sent to the first defendant and except his oral
evidence there is no other evidence in support of such plea, that there is no
evidence to show that the properties were purchased with the money sent by him,
that there was no document to show that since the date of partition till the
filing of the suit he had enjoyed the property. He admitted  that he himself had
given the partition deed to the first defendant,  that he had never been in
possession of the property which is the subject matter of the suit, that he had
never made any attempt to pay tax in respect of the property and that he never
paid water tax for the water supplied to the property.  He also stated that he
gave partition deed to the first defendant allegedly in connection with the
exchange of sites  between himself and the Municipality and he did not obtain
any documents on any paper at the time of delivery of the said partition deed
and also for exchange of sites with the municipality and that there was no
document except his oral testimony. He also stated that the first defendant
signed on the plan submitted to the Municipality for the construction of the
house and that there is no evidence to show that the first defendant purchased
the site except his oral evidence.
        P.W.2 is the paternal uncle of the plaintiff and the first defendant. He
deposed that the partition deed was with him and it was taken from him by one
Baburao and it was given to the first defendant,  that the first defendant and
her husband were residing in the plaint A schedule property, that they later
converted it into a tiled house on the promise of the plaintiff that he would
send money to them and stated that the plaintiff had never relinquished his
rights in favour of the first defendant. He also admitted that father of the
plaintiff brought the husband of the first defendant to Peddapuram to make him
a Goldsmith. He admitted that he does not know as to who obtained permission for
construction of the house and compound wall in the suit land or about the
payment of house tax to the suit house.
        P.W.3 stated that himself and the husband of the first defendant effected
the partition between the plaintiff and other members of the family and that he
attested Ex.A.1
        P.W.4 deposed that she is working as a Senior Assistant in the Peddapuram
Municipality. She produced certain records such as demand register of 1985-86
demand register for the assessment years from 1970 to 71 etc. (Ex. X.1 to X.9 ).
She admitted that she does not know as to why name of P.W.1 was incorporated in
the original of Ex.X.2 but stated that above changes were effected only after
due enquiry.  She stated that she does not know when the name of P.W.1 was
incorporated in the original of Ex.X.2. She further stated that in the originals
of Exs.X2 and X.3 the name of the plaintiff was mentioned as the owner and she
cannot say who is in possession of the property and who is paying taxes to the
Municipality. She stated that Ex.B.2 order was passed by the Commissioner for
approval of the construction of the compound wall and so also Exs.B.3 to B.7 and
that all the plans are approved in the name of D.1,  that the receipts will be
prepared basing on the assessment register  and that Exs.B.27 to B.35 are the
water tax receipts paid by the D.1 though the assessment was registered in the
name of the plaintiff.
        P.W.5 is the son of the plaintiff and he filed Exs.A.5 to A.27 house tax
receipts of the plaint schedule property. He admitted that he does not know the
details of payment and the persons who paid the taxes to the Municipality with
regard to the suit schedule property and that his father filed the tax receipts
Exs.A.5 to A.27 before the Commissioner when he was examined at their house.
        The first defendant who was examined as D.W.1 reiterated the contents made
in the written statement. She admitted that she sold the house for Rs.500/- and
for that the vendors insisted for a letter from her brother and her brother sent
a power of attorney to her and that the sale consideration of Rs.500/- was
utilized by her and that the plaintiff filed a petition before the Municipality
for mutation in his name in the year 1982 that she did not give any notice to
the plaintiff and the Municipality during that time.
        D.W.2 is the son-in-law of D.W.2 and he supported the evidence of D.W.1
He admitted that the properties of D.W.1's husband were sold at Kakinada
subsequent to their shifting to Peddapuram and that the properties were sold for
the purpose of constructing house in the suit property.
        D.W.3 is the 15th  defendant and he categorically narrated that he
purchased the property from Rali Prasadarao and his sons under Ex.B.36 and that
the plaintiff or other defendants have no manner of right in the plaint schedule
property.
        Admittedly, the plaint A schedule property originally belongs to the
plaintiff.   The first defendant contends that this property was given to her by
the plaintiff by relinquishing his right over the property by delivering the
original of Ex.A.1 to her.  But the plaintiff contends that the original
partition deed was given by him to the first defendant for management of the
property and for exchange of the sites with the municipality.  In the absence of
any registered instrument under which the relinquishment pleaded by the
defendant  was affected, the plea of the first defendant that she secured title
from the plaintiff by oral relinquishment cannot be accepted. But the fact
remains  that the property was delivered to the first defendant and she was in
possession of the same from 1956 till the date of filing of the suit on
16.4.1986 i.e. for about 30 years and that she made improvements such as
constructions therein as evidenced by Exs.B.2 to B.7 after obtaining permission
from the Municipality.  Although the plaintiff had contended that he sent
amounts to the first defendant to make improvements and constructions on the
plaint A schedule property, and for purchase of B schedule property, admittedly
there is no documentary evidence in support of the same.
Curiously, the finding of the trial Court that the defendants have not acquired
title to the property by adverse possession has not been challenged by the
defendants by filing a separate appeal or by filing cross objections in this
appeal. In the absence of any challenge by the defendants to the said findings,
this Court has to accept the same as having become final and hold that the
plaintiff is the owner of the plaint A schedule property.
When there is no evidence adduced by the plaintiff to show that the
constructions/improvements in plaint A schedule property were made with his
money, it has to be taken that the first defendant had got the said
constructions made with her money under the belief that she is the owner of the
property. Admittedly, her husband was a gold smith and had properties in
Jagannayakapura of Kakinada and landed property at  Kadakuduru village, so money
could have been raised by her for constructions and improvements from these
sources.  Even though there was no transfer of title in favour of the first
defendant by way of relinquishment  as pleaded by her, it is admitted that she
was delivered the original of Ex.A.1 by the plaintiff and she had possession of
the plaint A schedule property from 1956 till the date of filing of the suit.
The plaintiff had never raised any objections to the constructions made on the
plaint A schedule property by the first defendant and by acquiescence allowed
her to believe that she was in possession of the plaint A schedule property in
her own right. Therefore, it has to be held that the first defendant in good
faith made constructions under a bona fide belief that she was the owner of the
property. Although a decree is granted to the plaintiff declaring his title to
the plaint A schedule property and also for recovery of possession of plaint A
schedule property, in the circumstances of the case referred to above  such a
decree has to be made subject to the plaintiff compensating the first defendant
for the value of the constructions made by her in the plaint A schedule property
in view of Section 51 of the Transfer of Property Act. Section 51 of the
Transfer of Property Act reads as follows.
" 51. Improvements made by bona fide holders under defective titles - When the
transferee of immoveable property makes any improvement on the property,
believing in good faith that he is absolutely entitled thereto, and he
subsequently is evicted therefrom by any person having a better title, the
transferee has a right to require the person causing the eviction either to have
the value of the improvement estimated and paid or secured to the transferee, or
to sell interest in the property to the transferee at the then market value
thereof, irrespective of the value of such improvement.
The amount to be paid or secured in respect of such improvement shall be the
estimated value thereof at the time of eviction.
When, under the circumstances aforesaid, the transferee has planted or shown on
the property crops which are growing when he is evicted therefrom, he is
entitled to such crops and to free ingress and egress to gather and carry them."
        In NARAYANA RAO v. BASAVARAYAPPA 2  the benefit of Section 51 of the      
Transfer of Property Act was granted to a purchaser who purchased bona fide in
ignorance of mortgage.    In HARILAL v. GORDHAN 3  it was held by the High Court
of Bombay that a purchaser from a defacto guardian of a minor,  who erroneously
believed that the guardian had an authority to sell,  was also entitled to the
benefit of section 51 of the Transfer of Property Act.
        On consideration of the entire evidence on record, I am of the view that
the judgment of the trial Court in this case cannot be interfered with as the
trial Court had rightly applied section 51 of the Transfer of Property Act in
the facts and circumstances of the case on hand.
        As regards the claim of the plaintiff to plaint B Schedule property, he
had contended that the said property was purchased by the first defendant with
his money and that the first defendant was a Benami owner and he is the real
owner. However, no evidence had been adduced before the trial Court by the
plaintiff that his money was utilized by plaintiff for purchase of plaint B
schedule property. Moreover such a transaction, even  if proved, would be hit by
the Benami Transactions ( Prohibition ) Act 1980.  Therefore, the plaintiff is
not entitled to any relief in respect of the B schedule property which was
purchased by the first defendant  and later gifted to defendant no.2  As the
first defendant had constructed the building in the plaint A Schedule property
with her money the plaintiff is not entitled to the relief of rendition of
accounts by the first defendant in respect of rents also.
        In NAND KISHORE's case ( 1 supra ) relied on by the learned counsel for
the appellant, the learned single Judge of the Rajasthan High Court held as
follows :
"39.  This provision applies in terms to a transferee who makes improvements in
good faith believing himself to be an absolute owner of the property. Nand
Kishore is not a transferee and I found above that he had no reason to believe
that he was the absolute owner of the property. Constructions cannot therefore,
be said to have been done in good faith. He is not entitled to any value of the
improvements either under Section 51 of the Transfer of Property Act and on
principle of justice, equity and good conscience. This principle can only be
invoked if Nand Kishore had acted in good faith.  The case of good faith was
neither pleaded nor proved rather it stands demolished. The decision relied on
behalf of the appellants have no applicability to the circumstances of the
case."
        In the said case, it was held that benefit of Section 51 of the Transfer
of Property Act should not be given to the tenant therein on the ground that he
was not a transferee of the property and that the tenant cannot be said to have
acted in good faith in making constructions of the property as he had no reason
to believe that he was the owner of the property. But in the present case, the
relationship between the parties, the entrustment of the property to the
management of the first defendant by the plaintiff apart from handing over title
deed Ex.A.1 to her, acquiescence by the plaintiff to the constructions made by
the 1st defendant in the property and  collection of rents by her and other
circumstanceessuggest that the 1st defendant was under the bonafide belief that
she was the owner of the property, and that there was relinquishment in her
favour by the plaintiff and his father in return for financial support given to
the plaintiff by the first defendant  and her husband by shifting from Kakinada
to Peddapuram. So it can be said that the improvements were made in good faith
by D.1 believing that she is the absolute owner of the property. So the said
decision in NANDKISHORE ( 1 supra ) does not apply to the facts of the present
case.
For the foregoing discussion, I do not see any merit in this appeal and the
judgment of the trial Court is confirmed.  The appeal is dismissed being devoid
of merits but in the circumstances without costs.

___________________________________    
JUSTICE M.S. RAMACHANDRA RAO        
DATE :    25-9-2012