THE HONOURABLE SRI JUSTICE N.R.L.NAGESWARA RAO            
APPEAL SUIT NOs.1471,1472 OF 2002    

01-04-2011

Vijayawada Municipal Corporation, Vijayawada rep. by its Commissioner,  Vijayawada.

Chagarlamudi Nageswara Rao and another  

Counsel for the Appellant : Sri V.L.N.G.K.Murthy

Counsel for the Respondents:Sri T.Subrahmanya Reddy  

:COMMON JUDGMENT:      

Both appeals arise out of the common judgment dated 15-07-2002 in O.S.Nos.559 of 1994 and 78 of 2001 passed by the Principal
A.S.No.1471 of 2002 was filed against the judgment in O.S.No.559 of 1994 and A.S.No.1472 of 2002 was filed against the judgme
The brief facts of the case are as under:-
 Suit O.S.No.559 1994 was filed for sale proceedings held by the defendant is null and void and for possession of the suit sc
The allegations in the plaint goes to show that the father of the plaintiff has inherited the land in Sy.No.141/B and in the
The Collector fixed the market value @ 22/- per square yard and the defendant requested the plaintiff and others to give cons
Meanwhile, the plaintiff requested the defendant when the site is not public purpose, the site may be deleted from the master
The plaintiff planned to construct apartments in the suit schedule property and the plaintiff was surprised to know that the
The defendant has filed a written statement contending that the suit is bad for want of notice under Section 685 of the Act;
"It is submitted that the plaint schedule land was marked for the public purpose in the Master Plan sanctioned by the Governm
        The V.M.C. is its Council Resolution No.578, dated 07.06.1994 has resolved to construct Kalyan Mandapam in 551.11 sq.Mts. in

The plaintiff has taken the sale consideration from the defendant's authorities in the year 1979 and failed to obtain the cle
On the basis of the pleadings, the following issues were framed for trial:-
1. Whether the plaintiff is entitled for declaration as prayed for?
2. Whether the suit is not maintainable for want of notice under section 685 of Hyderabad Municipal Corporation Act?
3. Whether the suit claim is barred by time?
4. To what relief?

A.S.NO.1472 of 2002
        When the above suit O.S.No.559 of 1994 was pending, O.S.No.78 of 2001 was filed by the plaintiff in O.S.No.559 of 1994 and a
        As the defendant is bent upon encroaching the property and also cause interference with possession and enjoyment the suit wa
        The defendant filed a written statement repeating the allegations in O.S.No.559 of 1994 mostly. Further facts were pleaded d
        The said representation was given by the Minister to the defendant on 22-10-1978 for remarks. Further more another represent
        The defendant has also requested the plaintiffs to obtain the "U.L.C" clearance. The plaintiffs have delivered the possessio
        The defendant developed park and maintaining it since 1992. The defendant also constructed watchmen quarters at the northern
        It was further informed that if any one of the above proposals is acceptable, they are ready to withdraw the suit O.S.No.559
        The defendant did not accept those proposals and was rejected by a letter dated 06-09-1999. The second plaintiff has again s
        The defendant pleaded that the defendant has been in continuous possession and enjoyment of the property since 1979. The all
        On the basis of the above pleadings, the following issues have been framed for trial.
1. Whether the plaintiff is entitled for permanent injunction as prayed for?
2. To what relief?

On behalf of the plaintiffs PWs.1 to 3 were examined and marked Exs.A-1 to A18 and on behalf of the defendant DWs.1 to 3 were
After considering the material evidence on record, the learned Senior Civil Judge has passed the following decrees:-
"The suit(O.S.No.559 of 1994) is decreed declaring that the sale proceedings held by the defendant is null and void. The defe

The suit (O.S.No.78 of 2001) is decreed directing the defendants not to interfere with the peaceful possession and enjoyment

Aggrieved by the said common judgment, the present appeals are filed.
Heard Sri V.L.N.G.K.Murthy, the learned Senior Counsel for the appellant and Sri T.Subrahmany Reddy, the learned Senior Couns
Now the points that arise for consideration are:-
(1) Whether the declaration about the sale transaction given by the lower court is legal?
(2) Whether the direction given by the lower court for refund of the money paid towards consideration is legal?
(3) Whether the relief of permanent injunction granted by the lower court is legal?
(4) Whether there is any fraud or misrepresentation of any fact played by the defendant in inducing the plaintiffs to sell th
POINTS:-
The learned Senior Counsel Sri V.L.N.G.K.Murthy representing the appellants contends that the whole approach of the lower cou
On the other hand, Sri T.Subrahmanya Reddy, the learned Senior Counsel on behalf of the plaintiffs repeated the contentions b
In view of the rival contentions of both parties, it is useful at the outset to see as to on what grounds the lower court has
In page.11 of the judgment the lower court found as follows:-
        "Since the land is demarcated in the master plan for public purpose as rightly put by the defendant in the written statement

Further in continuation of the same, in page.12 it was found as under:-
        "The situation as it stands now is that the title of the schedule property is not transferred in the name of the defendant.
At page 16 the learned Senior Civil Judge found that there is no free consent and the object is not lawful as the plaintiffs
Before considering the tenability of the judgment of the learned Senior Civil Judge, it is to be mentioned that no declaratio
Section 31: When cancellation may be ordered:-
(1) Any person against whom a written instrument is void or voidable, and who has reasonable apprehension that such instrumen

Therefore, granting of a declaration under Section 31 is discretionary and such a declaration is necessary only if there is a
The law with regard to avoidance of a contract being void or voidable is well settled. The party who seeks to challenge the t
        "Vitiation due to misrepresentation, fraud or coercion. Onus and burden of proof held lies on party seeking to deny contract

Section 17 of the Contract Act defines "fraud" which reads as under:-
 "Fraud" means and includes any of the following acts committed by a party to a contract, or with his connivance, or by his a
(1) the suggestion, as a fact, of that which is not true by one who does not believe it to be true;
(2) the active concealment of a fact by one having knowledge or belief of the fact;
(3) a promise made without any intention of performing it;
(4) any other act fitted to deceive; (5) any such act or omission as the law specially declares to be fraudulent.

Section 18 of the said Act deals with misrepresentation, which reads as under:-
        "Misrepresentation" means and includes-
(1) the positive assertion, in a manner not warranted by the information of the person making it, of that which is not true,
(2) any breach of duty which, without an intent to deceive, gains an advantage to the person committing it, or any one claimi
(3) causing, however innocently, a party to an agreement to make a mistake as to the substance of the thing which is the subj

In the decision reported in Shanti Budhiya Vesta Patel and Others Vs. Nirmala Jayprakash Tiwari and others(2) it was held tha
        "Misrepresentation or mistake of fact or frustration of contract - Loss of right to avoid the contract on the ground of misr

        Further more it was held as under:-
        Voidability of agreements - Provision regarding - Applicability - Held not applicable to concluded contracts where the party

In Reliance Salt Ltd., Vs. Cosmos Enterprises and another (4), it was held that fraud which vitiates the contract must have a
"Delay and laches - Effect of, on entitlement of relief - Deed for sale of mill executed with the stipulation that part of th

"Blameworthy conduct of both the plaintiff and the respondent - Effect - Deed for sale of mill executed with the stipulation

        It is further useful to refer to a decision reported in Prem Singh and others Vs. Birbal and others (6) whereunder it was he
        The counsel for the respondents contends that the provisions of Urban Land Ceiling Act are not applicable and therefore adva
        The question before the court is that whether the transactions entered by the plaintiffs under the sale deeds Exs.B-12 to B-
        Infact as can be seen from the several correspondence between the parties it was the plaintiffs that were almost beseeching
        "That we have rights over the land situated in D.No.141/1RU Satyanarayana Puram, behind Railway Quarters, Vijayawada measuri

        This is the voluntary offer made by the plaintiffs consciously and for that a reply was given under Ex.A-4 dated 08-03-1977
        Accordingly, the Collector has issued Ex.B-4 proceedings dated 10-08-1978 exercising the power under Section 42(2) of A.P. M
        "Later, as per the above orders, we have requested the Commissioner, Vijayawada Municipality to pay the suitable considerati
        Then, the Municipal Commissioner, Vijayawada inspected our land and vide his letter R.C.G.44449/76, dt.13-09-78 informed us
        We are very much surprised to see the above orders and also we were kept in dark. The Municipality, Vijayawada taken two yea
        This representation unequivocally shows that the plaintiffs are aware that proposals were sent for dereservation and they we
        Even otherwise in the representation made to the Chief Minister and also to the Municipal Commissioner in 1999 two proposals
1) My brother and Myself are willing to surrender the land in which the part construction was already done by the V.M.C. Vija
2) We are agreeing to compensate/repay the amount incurred by the Municipal Corporation Vijayawada for construction of buildi

Hence it is futile for the plaintiffs to contend that there was suppression of fact or fraud.
The lower court has taken the view that the sale transactions are void as they are against the statute. The land was sold for
        "Whereas the Municipal Council of Vijayawada Municipality has agreed to purchase the aforesaid land of 90 cents for utilizin

This the lower court has taken as a vitiation of the transaction.
This is not at all correct. The above statement shows that on 15-04-1978 a resolution was passed by the Council for construct
Therefore, by any sound reasoning it is difficult to believe that the plaintiffs have not parted with the possession of the p
The finding of the lower court that after issuance of the notice from U.L.C. authorities in 1985, no steps were being taken b
Further more by the time of transaction evidently the Municipalities Act was applicable and under Section 42(1) and (2) the a
        "In case the area, for which a layout is sought for, falls in a Master Plan or in a Town Planning Scheme and for which a dra
       
Therefore, it is the obligation of the owner of the property to transfer the land free of cost whereas in cases of master pla
        In this case, evidently, the purpose of acquisition is for the "park" and even though the plaintiffs cannot alienate to thir
The learned counsel for the respondents relied upon the decision reported in Bhikhubai Vithlabhai Patel & Ors Vs. State of Gu

Evidently when once it is to be held that the transaction is not void and the grounds of challenge are on the basis of voidab
"That you have taken a letter from us stating that our land measuring to an extent of Ac.0.90 cents which was earmarked as "P

Therefore, by Ex.A-18 dated 05-03-1982 the contract was rescinded and the sale deed was intended to be cancelled. This is dat
        In the result, both Appeal Suits (A.S.Nos.1471 and 1472 of 2002) are allowed, setting aside the common judgment and decree o

?1 (2011) 1 SCC 167
2 (2010) 5 SCC 104
3 (2003) 12 SCC 91
4 (2006) 13 SCC 599
5 (2002)   5 SCC 383
6 (2006)  5 SCC 353
7 AIR 2008 S.C.1771
8 AIR 1964 A.P. 360
9 AIR 1972 A.P 96
10 (2007) 10 SCC 448