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Sunday, November 24, 2013

Limitation Act, 1963 - s.22 - Suit filed alleging that the defendants had illegally encroached on a public street - Trial court decreed the suit and issued permanent injunction - Decree challenged on the ground that the suit itself was barred by limitation - Held: The suit could not be said to be barred by limitation as encroachment on a public street is a continuing wrong and therefore, there existed a continuing cause of action - S.22 of the Limitation Act would apply - Code of Civil Procedure, 1908. = HARI RAM ....Appellant Versus JYOTI PRASAD & ANR. ... Respondents = http://judis.nic.in/supremecourt/helddis.aspx

        Limitation Act, 1963 - s.22 - Suit filed alleging that the defendants had
illegally encroached on a public street - Trial court decreed the suit and
issued permanent injunction - Decree challenged on the ground that the suit
itself was barred by limitation - Held: The suit could not be said to be
barred by limitation as encroachment on a public street is a continuing
wrong and therefore, there existed a continuing cause of action - S.22 of
the Limitation Act would apply - Code of Civil Procedure, 1908.

Code of Civil Procedure, 1908:

Order I Rule 8 - Suit filed alleging that the defendants had made illegal /
unauthorized construction over a 10 feet wide public street by way of
illegal encroachment - Trial court decreed the suit and issued permanent
injunction directing removal of unauthorized construction -  Decree
challenged, on the ground that the suit was bad for non-compliance of the
provisions of Order I Rule 8 - Held: Apart from being a representative
suit, the suit was filed by an aggrieved person whose right to use public
street of 10 feet width was prejudicially affected - Since the affected
person himself had filed a suit, therefore, the suit cannot be dismissed on
the ground of alleged non-compliance of the provisions of Order I Rule 8 -
Any member of a community may successfully bring a suit to assert his right
in the community property or for protecting such property by seeking
removal of encroachment therefrom and in such a suit he need not comply
with the requirements of Order I Rule 8 - In that view of the matter, the
suit filed was maintainable.

Suit filed by respondents alleging that the defendants had made illegal /
unauthorized construction over a 10 feet wide public street by way of
illegal encroachment - Trial court decreed the suit and issued permanent
injunction directing removal of unauthorized construction - Decree affirmed
by First Appellate Court as also High Court - Challenge to, on the ground
that it was not proved that the suit land was a public street in which
encroachment was made by the appellant-defendant - Held: On appreciation of
the evidence, all the three courts below namely the High Court, the First
Appellate Court as also the trial court held that the disputed suit land is
a part of the public street where the appellant had encroached upon - The
aforesaid findings are findings of fact - The evidence on record proved
that there existed a public street of 10 feet width and also that the
appellant had encroached upon the suit property consisting of the aforesaid
street of 10 feet width - Decree passed by the trial court accordingly
confirmed.

The respondents filed civil suit alleging that appellant-defendant and
another defendant had made illegal / unauthorized construction over a  10
feet wide public street by way of illegal encroachment, and accordingly
prayed for mandatory injunction against the defendants. The trial court
decreed the suit and issued permanent injunction directing the removal of
unauthorized construction. The judgment and decree passed by the trial
Court was affirmed by the First Appellate Court (Additional District
Judge), and further affirmed by the High Court in second appeal.

In the instant appeal, the appellant challenged the judgments and decrees
passed by the courts below on three grounds, viz. 1) that the suit itself
was barred by limitation; 2) that the suit was bad for non-compliance of
the provisions of Order I Rule 8 of the CPC and 3) that no official
document was placed and no official witness was examined to prove and
establish that the suit land was a public street in which encroachment was
made by the appellant.





                    Dismissing the appeal, the Court

HELD:1.1. The records placed disclose that the appellant in his written
statement took up a plea that the suit is barred by limitation. However,
despite the said fact no issue was framed nor any grievance was made by the
appellant for non-framing of an issue of limitation. The appellant did not
make any submission before the trial court and the first appellate court
regarding the plea of limitation. The said plea was made before the High
Court which held that although such a plea was not raised either before the
trial court or before the appellate court, the same could be raised before
the High Court in view of the provisions of Section 3 of the Limitation Act
which places an obligation upon the Court to discuss and consider such a
plea despite the fact that no such plea was raised and argued before the
Trial Court as also before the First Appellate Court.  The High Court after
considering the aforesaid plea held that the suit cannot be said to be
barred by limitation as an encroachment on a public street is a continuing
wrong and therefore, there exists a continuing cause of action. The records
disclose that initially a complaint under Section 133 of Cr.PC was filed
which was pursued with all sincerity upto the High Court. But the High
Court held that the dispute between the parties could be better resolved if
a proper civil suit is filed and when evidence is led with regard to the
disputed questions of fact.  Immediately thereafter the aforesaid suit was
filed seeking issuance of a mandatory injunction. In view of the aforesaid
facts and also in view of the fact that encroachment on a public street by
any person is a continuing cause of action, there is no merit in the said
contention. [Paras 15, 16, 17] [1086-G-H; 1087-A-E]

1.2. Any act of encroachment is a wrong committed by the doer.  Such an
encroachment when made to a public property like encroachment to public
road would be a graver wrong, as such wrong prejudicially affects a number
of people and therefore is a public wrong.  So long any obstruction or
obstacle is created to free and unhindered access and movement in the road,
the wrongful act continues thereby preventing the persons to use the public
road freely and unhindered. Therefore, that being a continuing source of
wrong and injury, cause of action is created as long as such injury
continues and as long as the doer is responsible for causing such injury.
[Para 18] [1087-F-H; 1088-A]

1.3. Section 22 of the Limitation Act, 1963, provides that "in case of a
continuing breach of contract or in case of a continuing tort, a fresh
period of limitation begins to run at every moment of the time during which
the breach or the tort, as the case may be, continues." In an earlier case,
this court had held that when a right of way is claimed whether public or
private over a certain land over which the tort-feaser has no right of
possession, the breaches would be continuing, to which the provisions of
Section 22 of the Limitation Act, 1963, would apply. Therefore, the plea
that the suit is barred by limitation has no merit at all. [Para 19] [1088-
C-E]

Sankar Dastidar v. Shrimati Banjula Dastidar and Anr., AIR 2007 SC 514 -
relied on.

2. Apart from being a representative suit, the suit was filed by an
aggrieved person whose right to use public street of 10 feet width was
prejudicially affected.  Since the affected person himself has filed a
suit, therefore, the suit cannot be dismissed on the ground of alleged non-
compliance of the provisions of Order I Rule 8 of the CPC. Any member of a
community may successfully bring a suit to assert his right in the
community property or for protecting such property by seeking removal of
encroachment therefrom and in such a suit he need not comply with the
requirements of Order I Rule 8 CPC. In that view of the matter, the suit
filed by the plaintiff/respondent No. 1 was maintainable. [Paras 20, 22 and
23] [1088-F-G; 1089-B-D]

Kalyan Singh, London Trained Cutter, Johri Bazar, Jaipur v. Smt. Chhoti and
Ors., AIR 1990 SC 396 - referred to.

3.1. The suit was initially instituted against two defendants.  The
appellant was defendant No. 2 in the said suit.  So far as defendant No. 1
is concerned, the records disclose that the Panchayat of the area took a
decision that both of them have encroached upon a public property and the
street and therefore they should remove the encroachment.  It is disclosed
from the records that pursuant to the aforesaid decision of the Panchayat,
the defendant No. 1 removed his encroachment after admitting that he had
also encroached upon some area of the 10 feet wide street which fact he
admitted before the panchayat and later on he removed the said
encroachment. The aforesaid fact is established from the statements of
PW-1, PW-5 and PW-6 who were present and participated in the said Panchayat
and also corroborated the said admission before the Panchayat. [Paras 24]
[1089-E-H; 1090-A]

3.2. In all 8 witnesses were examined by the plaintiff respondent No.1.
PW-3, who was examined in the suit proved the report of the BDO who had
visited the disputed property on 18.1.1995 after which he also submitted a
report certifying that an encroachment has been made by the appellant over
the disputed street. PW-4, the original owner of the entire area, had
specifically stated in his evidence that he had carved out a colony in the
year 1981-82 and he had sold the plots to the plaintiff as well as
defendants and other inhabitants of the village and towards eastern side of
the plot of the defendant/appellant he had left a street of 10 feet width.
As against the aforesaid evidence adduced on behalf of the
plaintiff/respondent No. 1, the appellant examined himself as DW-1 wherein
he only took a stand that disputed property is not a part of the street and
that after purchasing the plot he had constructed the house and despite the
said fact no objection was taken and therefore it cannot be said that he
had constructed a house also on a part of the said disputed suit property.
On appreciation of the aforesaid evidence, all the three courts namely the
High Court, the First Appellate Court as also the trial court held that the
aforesaid disputed suit land is a part of the public street where the
appellant has encroached upon by constructing a part of the house. The
aforesaid findings are therefore findings of fact.  Public Officer namely
Patwari was examined who had proved the report submitted by the BDO stating
that part of the suit property is a public street. [Paras 26, 27] [1090-E-
G]

3.3. The site plan (Ext. PW-7A) filed by the plaintiff/respondent proves
and establishes that there is a public street of 10 feet width.  In all the
sale deeds of the area as disclosed from the statement of PW-4, the
aforesaid street of 10 feet width is shown and the aforesaid evidence go
unrebutted. Thus there exists a street of 10 feet width. It is also proved
from the evidence on record that the appellant has encroached upon the suit
property consisting of the aforesaid street of 10 feet width.  That being
the position, there is no infirmity in the judgment and decree passed by
the Trial Court and affirmed by the First Appellate Court and by the High
Court in the Second Appeal. [Para 28] [1090-H; 1091-A-B]

4. The decree passed by the trial court is confirmed. If the appellant
fails to vacate and remove the unauthorized encroachment within a period of
60 days, it will be open for the plaintiff/respondent No. 1 to get the
decree executed in accordance with law. [Para 29] [1091-C-D]

Case Law Reference:

AIR 2007 SC 514 relied on Para 19
AIR 1990 SC 396 referred to Para 21

CIVIL APPELLATE JURISDICTION : Civil Appeal No. 1042 of 2011.

From the Judgment and Order dated 31.07.2009 of the High Court of Punjab
and Haryana at Chandigarh in RSA No. 2698 of 2008.

Anoop G. Choudhary and J. Chaudhary, Devendra Kr. Singh, Ajay A. and Prem
Sunder Jha for the Appellant.

Jasbir Singh Malik, Ekta Kadian, Devender Kumar Sharma and S.K. Sabharwal
for the Respondents

            1
                                                          REPORTABLE


                       IN THE SUPREME COURT OF INDIA

                        CIVIL APPELLATE JURISDICTION

                      CIVIL APPEAL NO. 1042     OF 2011

                 [Arising out of SLP (C) No. 35813 of 2009]



HARI RAM                                      ....Appellant


Versus



JYOTI

PRASAD       &

ANR.

       ...




Respondents

                             JUDGMENT



Dr. MUKUNDAKAM SHARMA, J.

1.     Leave granted.

2.     By this judgment and order, we propose to dispose of the

aforesaid appeal which is filed by the appellant herein after

being aggrieved by the judgment and order passed by the High Court
                                 2
in RSA No. 2698 of 2008 affirming the judgment and decree passed

by   the    trial    Court   in   Civil   Suit      No.   160   of   2003    which   was

affirmed by the First Appellate Court in Civil Appeal No. 92 of

2007.      These    facts,   therefore,      make   it    crystal    clear    that   the

present appeal is directed against the concurrent findings of fact

of the High Court, the first Appellate Court i.e. the judgment of

the Additional District Judge and the trial court which was the

Court of Civil Judge (Junior Division).



3.    In

order       to




appreciate the contentions raised before us by the learned counsel

appearing for the appellant, it would be necessary to set out

certain basic facts leading to filing of the present appeal.



4.    The suit was filed by the respondent herein contending inter

alia that all the six persons including respondent No. 1 have

their      common    interest     in   the    disputed      street    alongwith      co-

inhabitants of the same area.             It was stated that the residential
                               3
houses of the respondents are falling in the site plan which

indicates that there is a common street for ingress and egress of

the general public.        It was alleged in the plaint that earlier Bal

Kishan Dass who was examined as PW-4 was the original owner of the

entire area out of which he curved out a colony selling plots in

favour of various parties.         It was also stated in the plaint that

at that time itself a 10 feet wide public street was left on the

ground as detailed in the site plan for the common use of all the

plot

holders

of     the

colony,

but

further




allegation   was    that    the   appellant/defendant   from    the   time    of

possession of his plot had evil eye on the aforesaid disputed

street and the defendant No. 1 and he namely defendant No. 2

encroached upon substantial part of the same making the street

narrowed   down    causing   inconvenience   to   the   users   of    the   said

street. Incidentally the suit was filed invoking Order I Rule 8 of

Code of Civil Procedure [called in short `C.P.C.'].
                                           4
5.    In   the   plaint      it   was   further   stated     that    earlier    the

respondent No. 1 as complainant filed a complaint under Section

133   of   the   Code   of   Criminal    Procedure,   1973    (for    short    "the

Cr.P.C.") which was decided in favour of the plaintiff/respondent

No. 1 and the said judgment was passed by the SDM.



6.    When the matter was challenged before the Punjab and Haryana

High Court, the High Court held that the matter which is agitated

relates

to

disputed

facts   and

therefore

requires

evidence

and     that

the

dispute

between the parties could only be effectively decided if a civil

suit is filed.          As the High Court had held that the dispute

between the parties would be decided by filing a civil suit,

consequently the aforesaid plaint was filed in the Court of Civil

Judge (Junior Division) which was registered as Civil Suit No. 160

of 2003.
                                  5
7.   Defendant Nos. 1 and the present appellant as defendant No. 2

filed a combined written statement raising objections regarding

the maintainability of the suit and also with regard to the merit

of the contentions raised in the plaint.            On the basis of the

pleadings of the parties, four issues were framed by the trial

court to the following effect:

      1. Whether the defendants have made illegal / unauthorized
      construction over the public street by way of illegal
      encroachment as shown in red colour in the attached site




      plan shown by letters ABCD situated at village Matlauda,
      Distt. Panipat ? OPP.

      2.In case issue No. 1 is decided in favour of plaintiff,
      then whether plaintiff is also entitled to injunction, as
      prayed for? OPP.

      3.Whether suit filed by the plaintiff is not maintainable
      in the present form? OPD.

      4.Relief.



8.   To   substantiate   his   case,   the   plaintiff/respondent   No.   1
                                        6
examined    8   witnesses   and   produced     some   documents   whereas     the

present appellant as defendant No. 2 examined himself as DW-1 as a

sole witness. After recording the evidence adduced by the parties

the learned Civil Judge (Junior Division) heard the parties and

thereafter by a judgment and decree dated 6.12.2007 decreed the

suit and a permanent injunction was issued directing the removal

of unauthorized construction from the ground as shown in the site

plan.     Since, the defendant No. 1 had already removed his portion

of

illegal




construction, the present appellant was given one month's time to

remove all such constructions failing which respondent No. 1 was

given their legal right to get the said construction removed on

his   own   expenses   which   was   allowed    to    be   recovered   from   the

defendants.       The defendants were further restrained from raising

any further construction in future on the aforesaid 10 feet Rasta

as detailed in PW - 7A.
                                   7
9.    Being aggrieved by the aforesaid judgment and order passed by

the   trial    court,   an   appeal    was     filed    before   the   Additional

District Judge, Panipat whereas the appeal was registered as Civil

Appeal No. 92 of 2007.             The aforesaid appeal was heard by the

Additional District Judge who by his judgment and decree dated

25.7.2008      dismissed     the     appeal     filed     by     the   appellant.

Thereafter, the appellant filed a second appeal before the Punjab

and Haryana High Court which was registered as RSA No. 2698 of

2008.



10.   By   a

judgment

and

decree

dated




31.7.2009, the aforesaid appeal was also dismissed by the High

Court holding that there is no specific question of law involved

in the aforesaid appeal.



11.   Being still aggrieved, the present appeal was filed by the

appellant      herein   in   which    notice    was    issued    and   on   service

thereof, we heard the learned counsel appearing for the parties.
                                   8
12.    Mr. Anoop G. Choudhary, learned Senior Counsel appearing for

the appellant very forcefully argued that none of the judgments

and    decrees   passed     by   the   courts   below   is    justified.       He

submitted      that   the   suit   itself   was   barred     by   limitation   but

despite the said fact and despite the fact that a specific stand

was taken in the written statement contending that the suit is

barred by limitation, no such issue was framed by the trial Court

and no decision was rendered by the trial court as also by the

appellate

Court     on

the     said

issue   and

that     the

High

Court   was

not

justified

in

dismissing the plea raised by the appellant on the ground that the

cause of action is a continuing cause of action and, therefore, it

cannot be said that the suit is barred by limitation.                 His second

contention was that there could and should have been no finding

regarding the encroachment made by the appellant in absence of

production of any official document to indicate that there was in

fact a public street used by the residents of the area.                        He
                                9
submitted that no evidence has been led to prove and establish

that it was a public street on which encroachment was made by the

appellant. His last submission was that the suit was said to be in

representative capacity as shown in the plaint but the formalities

for instituting a case i.e. representative suit was not followed

and therefore the suit should have been dismissed at the very

threshold itself.



13.   The

aforesaid




submissions   of    the    learned   senior      counsel    appearing   for    the

appellant were refuted by the learned counsel appearing for the

respondents who placed before us the findings recorded by the

three courts below and relying on the same, it was submitted that

the present appeal has no merit at all.



14.   In the light of the aforesaid submissions of the counsel

appearing   for    the    parties,   we   also    perused    the   records    very
                                  10
carefully.     We would first deal with the plea of limitation as

raised before us by the appellant.



15.    The records placed before us do disclose that the appellant

in his written statement took up a plea that the suit is barred by

limitation. However, despite the said fact no issue was framed nor

any grievance was made by the appellant for non-framing of an

issue of limitation.



16.    On

going

through

the

records,

we do not

find    that

the

appellant

has made any submission before the trial court as also before the

first appellate court regarding the plea of limitation.     Such a

plea is seen to have been made before the High Court.     The said

plea which was made before the High Court was considered at length

by the High Court and the High Court held that although such a

plea was not raised either before the trial court or before the

appellate court, the same could be raised before the High Court in
                                11
view of the provisions of Section 3 of the Limitation Act which

places an obligation upon the Court to discuss and consider such a

plea despite the fact that no such plea was raised and argued

before the Trial Court as also before the First Appellate Court.



17.   The High Court after considering the aforesaid plea held that

the   suit     cannot    be    said    to   be    barred       by    limitation       as    an

encroachment      on    a     public   street     is     a     continuing         wrong    and




therefore,     there     exists    a   continuing        cause      of    action.          The

records disclose that initially a complaint under Section 133 of

Cr.PC was filed which was pursued with all sincerity upto the High

Court.   But    the     High   Court   held      that    the     dispute      between      the

parties could be better resolved if a proper civil suit is filed

and when evidence is led with regard to the disputed questions of

fact.    We find from the records that immediately thereafter the

aforesaid      suit     was    filed    seeking         issuance         of   a    mandatory
                                 12
injunction. In view of the aforesaid facts and also in view of the

fact that encroachment on a public street by any person is a

continuing     cause    of    action,     we    find       no   merit       in   the   said

contention.



18.    Any act of encroachment is a wrong committed by the doer.

Such     an   encroachment     when     made    to     a    public         property    like

encroachment to public road would be a graver wrong, as such wrong




prejudicially affects a number of people and therefore is a public

wrong.    So long any obstruction or obstacle is created to free and

unhindered     access   and    movement    in    the       road,     the    wrongful    act

continues thereby preventing the persons to use the public road

freely and unhindered. Therefore, that being a continuing source

of wrong and injury, cause of action is created as long as such

injury    continues     and   as   long   as    the    doer     is    responsible       for

causing such injury.
                                          13


19.    At this stage it would be apposite to refer to and rely upon

Section 22 of the Limitation Act, 1963, which reads as follows:

        "In case of a continuing breach of contract or in
        case of a continuing tort, a fresh period of
        limitation begins to run at every moment of the time
        during which the breach or the tort, as the case may
        be, continues."


This   court   had   the   occasion   to   deal   with   Section   22   of   the




Limitation Act, 1963, in the case of Sankar Dastidar v. Shrimati

Banjula Dastidar and Anr reported in AIR 2007 SC 514, in which the

Supreme Court held that when a right of way is claimed whether

public or private over a certain land over which the tort-feaser

has no right of possession, the breaches would be continuing, to

which the provisions of Section 22 of the Limitation Act, 1963,

would apply. Therefore, in our considered opinion the plea that

the suit is barred by limitation has no merit at all.
                                            14


20.    The next plea which was raised and argued vehemently by the

learned senior counsel appearing for the appellant was that the

suit was bad for non-compliance of the provisions of Order I Rule

8 of the CPC. The said submission is also found to be without any

merit as apart from being a representative suit, the suit was

filed by an aggrieved person whose right to use public street of

10 feet width was prejudicially affected.              Since affected person

himself

has    filed

a      suit,




therefore, the suit cannot be dismissed on the ground of alleged

non-compliance of the provisions of Order I Rule 8 of the CPC.



21.    In this connection, we may appropriately refer to a judgment

of    the   Supreme   in   Kalyan   Singh,    London   Trained   Cutter,   Johri

Bazar, Jaipur Vs. Smt. Chhoti and Ors. reported in AIR 1990 SC

396.    In paragraph 13 of the said judgment, this Court has held

that suit could be instituted by representative of a particular
                                 15
community but that by itself was not sufficient to constitute the

suit as representative suit inasmuch as for a representative suit,

the   permission   of    Court   under   Order   I    Rule      8   of   the   CPC   is

mandatory.



22.   In paragraph 14 of the said judgment, it was also held that

any member of a community may successfully bring a suit to assert

his   right   in   the   community   property        or   for       protecting   such

property

by

seeking

removal

of




encroachment therefrom and that in such a suit he need not comply

with the requirements of Order I Rule 8 CPC.                 It was further held

in the said case that the suit against alleged trespass even if it

was not a representative suit on behalf of the community could be

a suit of this category.
                                   16
23.    In that view of the matter and in the light of the aforesaid

legal position laid down by this Court, we hold that the suit

filed by the plaintiff/respondent No. 1 was maintainable.



24.    According to the appellant no official document was placed

and no official witness was examined to prove and establish that

the suit land was a public street in which encroachment is made by

the appellant.      At this stage it would be appropriate to mention

that    the

suit    was

initially




instituted    against    two    defendants   namely   defendant    No.    1   and

defendant No. 2.        The appellant herein was defendant No. 2 in the

said suit.     So far as defendant No. 1 is concerned, the records

disclose that the Panchayat of the area took a decision that both

of them have encroached upon a public property and the street and

therefore they should remove the encroachment.               It is disclosed

from the records that pursuant to the aforesaid decision of the

Panchayat,    the   defendant    No.   1   removed   his   encroachment   after
                                17
admitting that he had also encroached upon some area of the 10

feet wide street which fact he admitted before the panchayat and

later on he removed the said encroachment. The aforesaid fact is

established from the statements of PW-1. Jyoti Parshad, PW-5 -

Sadhu Ram and PW-6 - Ram Pal who were present and participated in

the said Panchayat also corroborated the said admission before the

Panchayat.




25.

Besides,

in    all   8

witnesses

were

examined

by      the

plaintiff


respondent No. 1.            PW-3, Dharam Singh Patwari who was examined in

the suit proved the report of the BDO who had visited the disputed

property    on       18.1.1995    after   which   he    also   submitted   a   report

certifying that an encroachment has been made by the appellant

over the disputed street.             Bal Kishan Dass who was also examined

as PW-4 had specifically stated in his evidence that he had carved

out a colony in the year 1981-82 and he had sold the plots to the

plaintiff       as    well   as   defendants   and     other   inhabitants     of   the
                                               18
village       and      towards      eastern     side   of     the    plot    of      the

defendant/appellant he had left a street of 10 feet width.



26.    As against the aforesaid evidence adduced on behalf of the

plaintiff/respondent No. 1, the appellant examined himself as DW-1

wherein he only took a stand that disputed property is not a part

of     the    street     and     that   after    purchasing    the    plot    he     had

constructed the house and despite the said fact no objection was

taken    and

therefore

it    cannot

be      said

that         he

had




constructed a house also on a part of the said disputed suit

property.



27.    On    appreciation      of   the   aforesaid    evidence,     all    the    three

courts namely the High Court, the First Appellate Court as also

the trial court held that the aforesaid disputed suit land is a

part of the public street where the appellant has encroached upon

by constructing a part of the house. The aforesaid findings are
                                       19
therefore findings of fact.          Public Officer namely Patwari was

examined who had proved the report submitted by the BDO stating

that part of the suit property is a public street.



28.    Ext. PW-7A filed by the plaintiff/respondent is a site plan

which proves and establishes that there is a public street of 10

feet width.    In all the sale deeds of the area as disclosed from

the statement of PW-4 Bal Kishan Dass, the aforesaid street of 10

feet

width    is

shown   and

the

aforesaid

evidence

go




unrebutted. Thus there exists a street of 10 feet width.                It is

also proved from the evidence on record that the appellant has

encroached    upon   the   suit   property   consisting   of   the   aforesaid

street of 10 feet width.           That being the position, we find no

infirmity in the judgment and decree passed by the Trial Court and

affirmed by the First Appellate Court and by the High Court in the

Second Appeal.
                                            20
29.   We,    therefore,    find      no    merit     in   this      appeal   which   is

dismissed with costs, which is assessed by us at Rs. 10,000/-.

The   decree   passed     by   the    trial     court       is    confirmed.   If    the

appellant fails to vacate and remove the unauthorized encroachment

within a period of 60 days from today, it will be open for the

plaintiff/respondent       No.    1       to   get    the        decree   executed    in

accordance with law.




30.     In

terms   of

the

aforesaid




observations and directions, the appeal is dismissed.



                                      ........................J
                                      [Dr. Mukundakam Sharma]



                                      ........................J
                                      [Anil R. Dave]
New Delhi



January 27, 2011

Benami Transactions (Prohibition) Act 1988: s.4 - Benami transaction - Suit filed prior to the Act coming into force to recover the possession of benami property - Held: Would not be hit by the prohibition u/s.4 of the Act. Evidence Act, 1872: s.114 - Presumption of service - In the instant case, notice sent under postal certificate from one house to another house on the same road - Inference can be drawn u/s.114 that such notice must have been duly served in the normal course of business within 5 days.= Samittri Devi and another. ...Appellants Versus Sampuran Singh and another ...Respondents = published in http://judis.nic.in/supremecourt/helddis.aspx

   Benami Transactions (Prohibition) Act 1988: s.4 - Benami transaction - Suit
filed prior to the Act coming into force to recover the possession of
benami property - Held: Would not be hit by the prohibition u/s.4 of the
Act.

Evidence Act, 1872: s.114 - Presumption of service - In the instant case,
notice sent under postal certificate from one house to another house on the
same road - Inference can be drawn u/s.114 that such notice must have been
duly served in the normal course of business within 5 days.

Appellant no.1 purchased the suit house on 26.2.1985 for a consideration of
Rs. 40,000. The sale deed was, however, executed in the name of her son-
defendant-appellant no.2 and his brother-in-law- respondent no. 2. It was
the case of appellant no. 1 that appellant no.2 and respondent no. 2 sold
half share of the suit house to respondent no.1 without her consent and
knowledge. The said transaction of sale was executed by a registered sale
deed dated 13.4.1987 despite the fact that appellant no.1 had sent letter
dated 8.4.1987 to respondent no.1 informing him that she was the real owner
of the suit house.

Appellant no. 1 filed a suit for declaration that she was the real owner in
possession of the suit house. She also prayed for a permanent injunction
restraining the defendants from alienating any part of the suit house. By
amendment, she claimed an alternative relief for a decree of Rs. 40,000
with interest. Appellant no. 2 admitted the claim of appellant no. 1, but
respondent no. 2 disputed it and contended that half of the consideration
of Rs. 40,000 has been paid by him. He denied that it was a Benami
Transaction. Respondent no.1 contended in written statement that even if it
is proved to be a Benami Transaction, due to the recent legislation of
Benami Transactions (Prohibition) Act 1988, appellant no.2 and respondent
no.2 were the owners of the suit property, and that the alienation by
respondent no. 2 of his share in the property was effected legally.

Appellant No. 1 had produced before the trial court a copy of the notice
dated 8.4.1987 alongwith the certificate of posting which she had sent to
defendant no. 3, to state that she was the real owner of the suit house.
The trial court held that the delivery of the notice was not proved, and
therefore, respondent no.1 was a bonafide purchaser for valuable
consideration. It also held that the prohibition under Section 4 of the Act
to recover the Benami property was applicable to suits, claims or action
pending on the date of commencement of the Act. Appellant no.1 had filed
the suit on 30.9.1987. The Benami Transactions (Prohibition) Act 1988 came
into force on 5.9.1988. Thus, this suit was pending on the date on which
the Act came into force and the appellant no longer retained the right to
recover the property from the Benami holder. The suit was, therefore,
dismissed for being barred by virtue of the provisions of the said Act.

The first appellate court held that the suit was not prohibited by the Act
and respondent no. 1 could not be held to be a bonafide purchaser without
any notice of the rights of appellant no. 1 in the suit property. The first
appellate court, therefore, decreed the suit to the effect that appellant
no. 1 was the real owner in possession of the house and the sale deed dated
13.4.1987 was null and void. It also granted an injunction against the
defendants that they shall not alienate any part of the suit house and will
not interfere in her possession of the suit house.

The High Court did not give any importance to the notice dated 8.4.1987
being sent under postal certificate, but held that there was nothing on
record to prove that respondent no.1 had been served with that notice. The
High Court, therefore, found fault with the finding of the first appellate
court to the effect that respondent no. 1 was not a bonafide purchaser, and
further held that, it amounted to misreading of evidence. The Regular
Second Appeal was therefore, allowed and the judgment and decree of the
first appellate court was set aside. The appellants filed the instant
appeal challenging the order of the High Court.

               Allowing the appeal, the court

HELD: 1.1. As far as the purchase of the suit house by appellant no. 1 from
her own money was concerned that finding of the trial court has remained
undisturbed all throughout and cannot be re-opened in the instant appeal.
Appellant no.1 led cogent evidence before the trial court, and it was held
in her favour that she had purchased the suit house that out of her funds.
The submission of respondent no. 2 that he had arranged the amount of Rs.
20,000/- through friendly loans was negated by the trial court since there
was no supporting evidence at all. There was no reason to disturb that
finding. Once the High Court held that appellant no.1 had purchased the
suit house out of her funds, it ought to have held that it follows that
respondent no. 2 had no right to deal with it or to sell his half share
merely because his name was shown as a purchaser alongwith appellant no.2.
Consequently, the purchase of the share of respondent no.2 by respondent
no. 1 without the consent of appellant no.1 gave him no rights whatsoever.
Therefore, the High Court ought to have held that the suit of appellant
no.1 for declaration of her ownership was valid and maintainable. The High
Court has, therefore, committed a serious error of law in holding that the
first appellate court has misread the evidence on record while coming to
the conclusion that the suit property was the Benami Property of appellant
no.1 and that her suit to enforce the right concerning the same shall not
lie. In fact, there was no such misreading of evidence on the part of the
first appellate court, and hence there was no occasion for the High Court
to frame such a question of law in view of the prevailing judgment in *R.
Rajagopal Reddy which was rightly followed by the first appellate court.
[Paras 15, 17] [207-F-H; 211-A-C]

*R. Rajagopal Reddy v. Padmini Chandrasekharan decided on 31.1.1995 and AIR
1996 SC 238 - relied on.

Mithilesh Kumari and Anr. v. Prem Behari Khare AIR 1987 SC 1247 - referred
to.

1.2. The appellant's premises was situated on College Road, Pathankot and
so also the residence of the first respondent where the notice was sent.
Therefore, there was nothing wrong in drawing the inference which was
permissible under Section 114 of the Evidence Act that such notice must
have been duly served in the normal course of business before 13.4.1987. In
the present case it has already been established that the appellant had
purchased the property out of her own funds. Therefore, it could certainly
be expected that when she came to know about the clandestine sale of her
property to respondent no.1, she would send him a notice, which she sent on
8.4.1987. The notice is sent from one house on the College Road to another
house on the same road in the city of Pathankot. The agreement of purchase
was signed by the respondent no.3 five days thereafter i.e. 13.4.1987. The
appellant had produced a copy of the notice along with postal certificate
in evidence. There was no allegation that the postal certificate was
procured. In the circumstances, it could certainly be presumed that the
notice was duly served on respondent No.1 before 13.4.1987. The High Court,
therefore, erred in interfering in the finding rendered by the first
appellate court that respondent no.1 did receive the notice and, therefore,
was not a bona fide purchaser for value without a notice. [Paras 18, 23]
[210-F-G; 214-C-F]

Harihar Banerji v. Ramshashi Roy AIR 1918 PC 102; Gresham House Estate Co.
v. Rossa Grande Gold Mining Co. 1870 Weekly Notes 119; Ganga Ram v. Smt.
Phulwati AIR 1970 Allahabad 446; Mst. L.M.S. Ummu Saleema v. B.B. Gujaral &
Anr. 1981 (3) SCC 317; M.S. Madhusoodhanan v. Kerala Kaumudi (P) Ltd. and
others 2004 (9) SCC 204; VS Krishnan v. Westfort Hi-Tech Hospital Ltd. 2008
(3) SCC 363 - relied on.

2. The suit filed by appellant no.1 is decreed and it is declared that
appellant no. 1 is the owner of the suit house. There shall be a permanent
injunction restraining the defendants from alienating any part of the suit
house and forcibly interfering with the possession of the plaintiff of the
house in dispute. In view of the offer given by the appellants to
compensate the first respondent, the appellants shall pay him the amount of
Rs. 30,000/-, with simple interest at the rate of 10% for the period from
13.4.1987 till the decision of the first appellate court i.e. 22.2.1996,
within twelve weeks from today, though it is up to respondent no. 1 to
receive the amount. The interest is restricted upto 22.2.1996 for the
reason that respondent no.1 ought to have accepted the decision of the
first appellate court, particularly in view of the judgment of this Court
in *R. Rajagopal Reddy and should not have dragged the appellants to the
High Court. [Para 25] [215-B-E]

Case Law Reference:

AIR 1987 SC 1247 Referred to Para 10
AIR 1996 SC 238 Relied on Para 11
AIR 1918 PC 102 Relied on Para 19
1870 Weekly Notes 119 Relied on Para 19
AIR 1970 All 446 Relied on Para 20
1981 (3) SCC 317 Relied on Para 21
2004 (9) SCC 204 Relied on Para 22
2008 (3) SCC 363 Relied on Para 22

CIVIL APPELLATE JURISDICTION : Civil Appeal No. 846 of 2011.

From the Judgment & Order dated 10.09.2009 of the High Court of Punjab &
Haryana at Chandigarh in R.S.A. No. 1367 of 1996.

Sai Krishna Rajagopal, Hari Shankar K., Vikas Jangra, Bharat S. Kumar for
the Appellants.

V.K. Monga for the Respondents.


                                                   REPORTABLE
                      IN THE SUPREME COURT OF INDIA

                      CIVIL APPELLATE JURISDICTION

                      CIVIL APPEAL NO. 846           OF 2011

     ARISING OUT OF SPECIAL LEAVE PETITION (C) NO. 1305 OF 2010


Samittri Devi and another.                                       ...Appellants
                                     Versus

Sampuran Singh and another                                     ...Respondents




                               JUDGMENT



Gokhale J.

              Leave Granted.


2.            This Appeal by Special Leave raises the question as to whether the

suit of the first appellant for the recovery of her house property filed prior to the

Benami Transactions (Prohibition) Act, 1988 coming into force could be

considered to be prohibited by Section 4 of that Act.


3.            This appeal seeks to challenge the judgment and order passed by a

Learned Judge of the Punjab and Haryana High Court dated 10.9.2009 in Regular

Second Appeal (R.S.A) No. 1367 of 1996 (O & M), whereby the Judge has
                                                                          2

allowed the Second Appeal filed by Respondent No. 1 herein, and set aside the

judgment and order dated 22.2.1996 passed by the Additional District Judge,

Gurdaspur in Civil Appeal No. 203 of 1991 filed by appellant No.1 herein. The

Learned Additional District Judge had allowed the Civil Appeal filed by appellant

No. 1 herein whereby he decreed Civil Suit No. 138 of 1987 filed by appellant

No.1, which suit had been dismissed by the Sub-Judge at Pathankot by his

judgment and order dated 3.10.1991.


4.           Short facts leading to this appeal are as follows:-


             The appellant No.1 herein purchased a house property situated at

Pathankot from Sarvashri Romesh Chand and Chatar Chand sons of Shri Kartar

Singh, vide registered sale deed dated 26.2.1985 for a consideration of

Rs. 40,000/-. This sale deed was, however, executed in the name of her son

namely Shri Kamal Chand (the appellant No.2 herein) and his brother-in-law

Shri Jiwan Kumar (respondent No.2 herein). The appellant no.1 paid the money

by two bank drafts for purchasing the house property which was actually in the

possession of a tenant of the previous owner i.e. Home Guard Department and it

continues to be in their possession.


5.           It is the case of the appellant No.1 that taking advantage of her old

age (presently 93 years), the above referred Kamal Chand and Jiwan Kumar

stealthily removed the sale deed from her possession, and this Jiwan Kumar sold

half share of the suit house to one Sampuran Singh (Respondent No. 1 herein)
                                                                          3

and that too without her knowledge and consent. The sale was executed by a

registered sale deed dated 13.4.1987 despite the fact that appellant No.1 had

sent, in the meanwhile, a letter dated 8.4.1987 to Respondent No. 1 herein

informing him that she was the real owner of the Suit House.


6.            The appellant No. 1 therefore, filed Suit No. 138 of 1987 on

30.9.1987 for a declaration that she was the real owner in possession of the Suit

House shown in red in the site plan attached by letters A B C D part of No.

Khasra 574/1, No. Khawat 262, No. Khatauni 401, as entered in the Jamabandi

for the year 1976-77 situated in village Daulatpur HB No. 331, Pathankot. She

prayed for a permanent injunction also restraining the defendants from

alienating any part of the suit house and forcibly interfering with the possession

of the plaintiff of the suit house. By moving an amendment, she claimed an

alternative relief for a decree of Rs. 40,000/- with interest.    Her son Kamal

Chand was joined as defendant No. 1, his brother-in-law the above referred

Jiwan Kumar as defendant No. 2, and the purchaser Sampuran Singh as

defendant No. 3. They are appellant No.2, respondent No.2 and respondent No.

1 respectively to this appeal.


7.            Defendant No. 1 admitted the entire claim of the appellant, but the

defendant No. 2 disputed it, and contended that half of the consideration of Rs.

40,000/- had been paid by him. He denied that it was a Benami Transaction.

Defendant No. 3 filed his written statement and contended in para 5 thereof that

even if it is proved to be a Benami Transaction, due to the recent legislation of
                                                                            4

Benami Transactions (Prohibition) Act 1988, the defendants Nos. 1 & 2 were the

owners of the Suit property, and that the alienation of his share in the property

by defendant No. 2 in his favour had been effected legally. He contended that

he had purchased the share of the defendant No. 2 by sale deed dated

13.4.1987 for a consideration of Rs. 30,000/-, and that he was a bonafide

purchaser for value, and that the Suit should be dismissed.


8.            The trial court framed the necessary issues including whether the

sale deed dated 26.2.1985 was Benami, and whether the sale deed dated

13.4.1987 was illegal, and also whether defendant No. 3 was a bonafide

purchaser without notice.


9.            The appellant No. 1 laid the evidence amongst others of a clerk

from a branch of State Bank of Patiala at Chaki, Pathankot, who deposed to the

fact that the appellant had made the payment for the sale consideration from her

account. Defendant No. 2 had contended that he had arranged Rs. 20,000/-

from friendly loans to purchase half the share of the Suit House, but he did not

lead any evidence for proving the availability of such funds with him. The Trial

Court therefore, held that it was obvious that the payment was not made by

defendant nos. 1 & 2, but by the plaintiff i.e. the appellant No.1 herein.


10.           The appellant No.1 had produced before the trial court a copy of

the notice dated 8.4.1987 which she had sent to defendant no. 3, to point out to

him that she was the real owner of the suit house. She produced the same
                                                                          5

alongwith the certificate of posting. The sale deed between defendant Nos. 2 &

3 was executed on 13.4.1987. The trial court held that the delivery of the notice

was not proved, and therefore, defendant No. 3 was a bonafide purchaser for

valuable consideration without notice. That apart, at the time when the Suit was

decided on 3.10.1991, the law laid down by this Court in Mithilesh Kumari and

Anr. Vs. Prem Behari Khare [AIR 1987 SC 1247] : [1989 (2) SCC 95]

was governing the field viz. that the provisions of Benami Transactions

(Prohibition) Act 1988 were retroactive. It had been held that the prohibition

under Section 4 of the Act to recover the Benami property was applicable to

suits, claims or action pending on the date of commencement of the Act. The

appellant No.1 had filed her suit on 30.9.1987.        The Benami Transactions

(Prohibition) Act 1988 came into force on 5.9.1988. Thus, this Suit was pending

on the date on which the Act came into force.         The Trial Court, therefore,

followed the judgment in Mithilesh Kumari (supra), and held that the appellant

no longer retained the right to recover the property from the Benami holder.

The suit was, therefore, dismissed for being barred by virtue of the provisions of

the said Act, though without any order as to costs.


11.          The appellant No.1 carried the matter in first appeal to the

Additional District Judge, Gurdaspur.   As we have noted, the trial court had

already held that appellant No. 1 had purchased the suit house by making the

payment from her account. It had, however, declined to decree her suit on two

grounds, firstly due to the prohibition under Section 4 of the Benami
                                                                            6

Transactions (Prohibition) Act 1988 as interpreted in Mithilesh Kumari judgment

(supra), and secondly on the ground that the appellant did not prove the service

of her notice dated 8.4.1987 on respondent No. 1 herein. By the time the first

appeal was being heard, the judgment of the two Judges bench in Mithilesh

Kumari (supra) had been over-ruled by a bench of three Judges of this Court in

R.Rajagopal Reddy Vs. Padmini Chandrasekharan decided on 31.1.1995

and reported in [AIR 1996 SC 238] : [1995 (2) SCC 630]. This Court had

held that Section 4 or for that matter the Act as a whole was not a piece of

declaratory or curative legislation.   It creates substantive rights in favour of

benamidars and destroys substantive rights in favour of the real owners.          It

creates a new offence of entering into such benami transactions.            It had

therefore, been held that when a statutory provision creates a new liability and a

new offence, it would naturally have a prospective operation, and Section 4 will

not apply to pending suits which were already filed and entertained prior to the

Act coming into force. The first appellate Court therefore, held that the suit filed

by appellant No.1 was not prohibited by the said Act. As far as the notice dated

8.4.1987 is concerned, the Court held that there was a presumption under the

law that the letter which was proved to have been posted well in advance must

have reached the addressee. The first appellate court therefore, held that the

notice will have to be presumed to have been served, and yet respondent No. 1

herein got the sale deed executed on 13.4.1987. It was therefore, held that

respondent No. 1 could not be held to be a bonafide purchaser without any

notice of the rights of appellant No.1 in the suit property. The first appellate
                                                                          7

court therefore, decreed the suit filed by appellant No.1 to the effect that she

was the real owner in possession of the house and the sale deed dated

13.4.1987 was null and void.        It also granted an injunction against the

defendants that they shall not alienate any part of the suit house and will not

interfere in her    possession of the suit   house. The Court awarded cost of

Rupees 1,000/-.


12.          Feeling aggrieved by this decision, the first respondent herein filed

a Regular Second Appeal bearing RSA No. 1367 of 1996. The Learned single

Judge of the High Court, who heard the matter, framed the following substantial

question of law - "Whether the Learned Additional District Judge has misread the

evidence on record while coming to the conclusion that the suit property was

benami property of the plaintiff." The Learned Judge did not dispute the fact

that appellant No. 1 had purchased the suit house out of her money, but he

noted that the office of the Home Guard continued in that property.            The

Learned Judge did not give any importance to the notice dated 8.4.1987 being

sent under postal certificate, but held that there was nothing on record to prove

that defendant No.3 had been served with that notice.        The Learned Single

Judge therefore, found fault with the finding of the Additional District Judge to

the effect that defendant No. 3 (Respondent No. 1 herein) was not a bonafide

purchaser, and further held that, it amounted to misreading of evidence. The

Regular Second Appeal was therefore, allowed and the judgment and decree of

the Addl. District Judge was set aside.
                                                                          8

13.          Being aggrieved by the judgment and order passed by the High

Court this Appeal has been filed by the appellant. This time, the son of appellant

No.1, the original defendant No.1 has joined her as appellant No. 2.

Mr. Saikrishna Rajagopal, learned counsel appearing for the appellants pointed

out that the order passed by the High Court does not deal with the law laid down

in the judgment of this Court in R. Rajagopal Reddy case (Supra).              The

Judgment was binding on the Learned Judge, and in view thereof the suit filed

by the appellant No.1 was not hit by the prohibition under Section 4 of the Act.

He also pointed out that the appellants as well as the respondent No. 1 were

staying in the same area i.e. College Road, Pathankot, and therefore, the

Learned Additional District Judge was right in his inference that the notice dated

8.4.1987 must be presumed to have been duly served on respondent No. 1 prior

to 13.4.1987 when respondent No. 3 purchased half share of the suit house. He

submitted that the appellants were ready to return the amount of Rs.30,000/-

with interest to   respondent No. 1 which amount he claims to have paid to

respondent No. 2 to purchase his half share in the property.


14.          As against this submission of the appellant, Mr. V.K. Monga,

learned counsel appearing for respondent No. 1 repeated the same submissions

made in the courts below, namely, that he was a bonafide purchaser without

notice, and that the original defendant No. 2 had purchased half the share of the

suit house from his money, and from him the respondent No.1 had purchased

that share, and therefore, the present appeal should be dismissed.
                                                                            9

15.           We have noted the submission of the rival parties. As far as the

purchase of the suit house by the appellant No. 1 from her own money is

concerned that finding of the trial court has remained undisturbed all throughout

and cannot be re-opened in this appeal. The appellant No.1 led cogent evidence

before the trial court, and it had been held in her favour that it is out of her

funds that she had purchased the suit house. The submission of the original

defendant no. 2 that he had arranged the amount of Rs. 20,000/- through

friendly loans was negated by the trial court since there was no supporting

evidence at all. There is no reason for us to disturb that finding. Once the High

Court held that the appellant had purchased the suit house out of her funds, it

ought to have held that it follows that the defendant No. 2 had no right to deal

with it or to sell his half share merely because his name was shown as a

purchaser alongwith the appellant No. 2.       Consequently the purchase of the

share of the defendant No. 2 by the respondent No. 1 herein without the consent

of the appellant No. 1 gave him no rights whatsoever. Therefore, the High Court

ought to have held that the suit of appellant No. 1 for declaration of her

ownership to be valid and maintainable.


16.       The High Court has clearly erred in ignoring the binding judgment of a

Bench of three Judges of this Court in R. Rajagopal Reddy (supra).          By this

decision, this Court had reversed its earlier judgment in Mithilesh Kumari (supra)

and had held in terms that suits filed prior to the application of the act would not
                                                                               10

be hit by the prohibition under Section 4 of that act. Section 4(1) of the Benami

Transactions (Prohibition) Act 1988 reads as follows:


      "Prohibition of the right to recover property held benami.-
      (1) No suit, claim or action to enforce any right in respect of any
      property held benami against the person in whose name the
      property is held or against any other person shall lie by or on
      behalf of a person claiming to be the real owner of such property."

      While reversing the earlier decision of this Court in Mithilesh Kumari

(supra),   a   bench    of   three   Judges     observed    in   para    11      of

R. Rajagopal Reddy (supra) as follows:-


              "Before we deal with these six considerations which weighed
      with the Division Bench for taking the view that Section 4 will apply
      retrospectively in the sense that it will get telescoped into all
      pending proceedings, howsoever earlier they might have been
      filed, if they were pending at different stages in the hierarchy of
      the proceedings even up to this Court, when Section 4 came into
      operation, it would be apposite to recapitulate the salient feature of
      the Act. As seen earlier, the preamble of the Act itself states that it
      is an Act to prohibit benami transactions and the right to recover
      property held benami, for matters connected therewith or
      incidental thereto. Thus it was enacted to efface the then existing
      right of the real owners of properties held by others benami. Such
      an Act was not given any retrospective effect by the legislature.
      Even when we come to Section 4, it is easy to visualise that sub-
      section (1) of Section 4 states that no suit, claim or action to
      enforce any right in respect of any property held benami against
      the person in whose name the property is held or against any other
      shall lie by or on behalf of a person claiming to be the real owner
      of such property. As per Section 4(1) no such suit shall thenceforth
      lie to recover the possession of the property held benami by the
      defendant. Plaintiff's right to that effect is sought to be taken away
      and any suit to enforce such a right after coming into operation of
      Section 4(1) that is 19-5-1988, shall not lie. The legislature in its
      wisdom has nowhere provided in Section 4(1) that no such suit,
      claim or action pending on the date when Section 4 came into
      force shall not be proceeded with and shall stand abated. On the
      contrary, clear legislative intention is seen from the words "no such
                                                                              11

       claim, suit or action shall lie", meaning thereby no such suit, claim
       or action shall be permitted to be filed or entertained or admitted
       to the portals of any court for seeking such a relief after coming
       into force of Section 4(1)." (Emphasis supplied)

17.          In the impugned judgment, the High Court nowhere refers to the

judgment in R. Rajagopal Reddy's case (supra) although the same was very

much referred to and relied upon by the appellant to counter the contrary

submission of the respondent No. 1. The High Court has therefore, committed a

serious error of law in holding that the Additional District Judge has misread the

evidence on record while coming to the conclusion that the suit property was the

Benami Property of the plaintiff-appellant No.1 herein and that her suit to

enforce the right concerning the same shall not lie. In fact there was no such

misreading of evidence on the part of the first appellate court, and hence there

was no occasion for the High Court to frame such a question of law in view of

the prevailing judgment in R. Rajagopal Reddy which had been rightly followed

by the first appellate court.


18.       The High Court has held that there is nothing on record to suggest that

respondent No.1 herein had, in fact, been served with the notice dated 8.4.1987

and thereby reversed the finding rendered by the first appellate court.          It is

material to note in this behalf that it was canvassed by respondent No.1 before

the first appellate court that a certificate of posting is very easy to procure and it

does not inspire confidence. The Additional District Judge observed that there

was no dispute with this proposition of law, but there was no such averment or

even allegation against appellant No.1 herein, that she had procured the
                                                                                  12

certificate of posting nor was there any such pleading to that effect. It is on this

background that the first appellate court has drawn the inference that the notice

must be deemed to have been served within the period of five days thereafter

i.e. before 13.4.1987, the date on which the respondent No.1 herein entered into

an agreement to purchase the suit property. It is also material to note that the

appellant's premises are situated on College Road, Pathankot and so also the

residence of the first respondent where the notice was sent. Therefore, there

was nothing wrong in drawing the inference which was permissible under Section

114 of the Evidence Act that such notice must have been duly served in the

normal course of business before 13.4.1987.


19.            We may fruitfully refer to a few judgments laying down the

propositions relating to service of notice.      To begin with, we may note two

judgments in the context of the notice to quit, sent to the tenants under Section

106 of the Transfer of Property Act 1882, though both the judgments are

concerning the notices sent by registered post. Firstly, the judgment in the case

of Harihar Banerji Vs. Ramshashi Roy [AIR 1918 PC 102], wherein the

Privy Council quoted with approval the following observations in Gresham

House Estate Co. Vs. Rossa Grande Gold Mining Co. [1870 Weekly

Notes 119] to the following effect:


       "..........if a letter properly directed, containing a notice to quit, is
       proved to have been put into the post office, it is presumed that
       the letter reached its destination at the proper time according to
       the regular course of business of the post office, and was received
       by the person to whom it was addressed. That presumption would
                                                                                  13

       appear to their Lordships to apply with still greater force to letters
       which the sender has taken the precaution to register, and is not
       rebutted but strengthened by the fact that a receipt for the letter is
       produced signed on behalf of the addressee by some person other
       than the addressee himself."

20.        Secondly, we may refer to the judgment of a Full Bench of the Allahabad

High Court in the case of Ganga Ram Vs. Smt. Phulwati [AIR 1970

Allahabad 446], wherein the Court observed in paragraphs 12 and 13 as

follows:


       "12. When a registered article or a registered letter is handed
       over to an accepting or receiving post office, it is the official duty of
       the postal authorities to make delivery of it to the addressee.
       Human experience shows that except in a few exceptional cases
       letters or articles received by the post office are duly, regularly and
       properly taken to the addressee. Consequently as a proposition it
       cannot be disputed that when a letter is delivered to an accepting
       or receiving post office it is reasonably expected that in the normal
       course it would be delivered to the addressee. That is the official
       and the normal function of the post office.

       13.   Help can also be taken from Section 16 of the Indian
       Evidence Act which reads as follows:-

       "When there is a question whether a particular act was done, the
       existence of any course of business, according to which it naturally
       would have been done, is a relevant fact.

       Illustrations:

       (a)    The question is, whether a particular letter was dispatched.
       The facts that it was the ordinary course of business for all letters
       put in a certain place to be carried to the post, and that that
       particular letter was put in that place, are relevant.

       (b)    The question is, whether a particular letter reached A. The
       facts that it was posted in due course, and was not returned
       through the Dead Letter Office, are relevant."
                                                                              14

21.       As far as a notice sent under postal certificate is concerned, in Mst.
L.M.S. Ummu Saleema Vs. B.B. Gujaral & Anr. [1981 (3) SCC 317], a
bench of three judges of this Court on the facts of that case, refused to accept
that the notice sent under a postal certificate by a detenue under the
Conservation of Foreign Exchange and Smuggling Activities Act, 1974, to the
Assistant Collector of Customs, retracting his original statement had been duly
served on the concerned office.   This was because the respondent rebutted the
submission by producing their file to show that such a letter had not been
received in their office in the normal course of business.          However, the
proposition laid down in that case is relevant for our purpose.        This Court
observed in paragraph 6 of that judgment as follows:

      "6. ............The certificate of posting might lead to a presumption
      that a letter addressed to the Assistant Collector of Customs was
      posted on August 14, 1980 and in due course reached the
      addressee. But, that is only a permissible and not an inevitable
      presumption. Neither Section 16 nor Section 114 of the Evidence
      Act compels the court to draw a presumption. The presumption
      may or may not be drawn. On the facts and circumstances of a
      case, the court may refuse to draw the presumption. On the other
      hand the presumption may be drawn initially but on a
      consideration of the evidence the court may hold the presumption
      rebutted and may arrive at the conclusion that no letter was
      received by the addressee or that no letter was ever despatched as
      claimed. After all, there have been cases in the past, though rare,
      where postal certificates and even postal seals have been
      manufactured. In the circumstances of the present case,
      circumstances to which we have already referred, we are satisfied
      that no such letter of retraction was posted as claimed by the
      detenu."

22.    The proposition laid down in this judgment has been followed in two

subsequent cases coming before this Court in the context of Section 53(2) of the

Companies Act 1956 providing for presumption of service of notice of the board

meeting, sent by post. In M.S. Madhusoodhanan vs. Kerala Kaumudi (P)

Ltd. and others [2004 (9) SCC 204], a bench of two Judges of this Court
                                                                           15

referred to the proposition in Mst. L.M.S. Ummu Saleema (supra) in para 117 of

its judgment, and held in the facts of that case, that the notice by postal

certificate could not be presumed to have been effected, since the relations

between the parties were embittered, and the certificate of posting was suspect.

As against that, in a subsequent matter under the same section, in the case of

VS Krishnan Vs. Westfort Hi-Tech Hospital Ltd. [2008 (3) SCC 363],

another bench of two Judges referred to the judgment in M.S. Madhusoodhanan

(supra), and drew the presumption in the facts of that case that the notice sent

under postal certificate had been duly served for the purposes of Section 53(2)

of the Companies Act, 1956, since the postal receipt with post office seal had

been produced to prove the service. Thus, it will all depend on the facts of each

case whether the presumption of service of a notice sent under postal certificate

should be drawn. It is true that as observed by the Privy Council in its above

referred judgment, the presumption would apply with greater force to letters

which are sent by registered post, yet, when facts so justify, such a presumption

is expected to be drawn even in the case of a letter sent under postal certificate.


23.       Having seen the factual and the legal position, we may note that in the

present case it has already been established that the appellant had purchased

the property out of her own funds. Therefore, it could certainly be expected that

when she came to know about the clandestine sale of her property to

respondent No.1, she would send him a notice, which she sent on 8.4.1987. As

noted earlier, the notice is sent from one house on the College Road to another
                                                                           16

house on the same road in the city of Pathankot. The agreement of purchase is

signed by the defendant No.3 five days thereafter i.e. 13.4.1987. The appellant

had produced a copy of the notice along with postal certificate in evidence.

There was no allegation that the postal certificate was procured.           In the

circumstances, it could certainly be presumed that the notice was duly served on

respondent No.1 before 13.4.1987.         The High Court, therefore, erred in

interfering in the finding rendered by the Additional District Judge that

respondent No.1 did receive the notice and, therefore, was not a bona fide

purchaser for value without a notice.


24.          The judgment of the High Court, therefore, deserves to be set

aside.   The appellants through their counsel have, however, in all fairness

offered to compensate the first respondent herein by paying him the amount of

Rs. 30,000/- with appropriate interest. The first respondent did not evince any

interest in this suggestion. Yet, the end of justice will be met, if this amount of

Rs. 30,000/- is returned by the appellants to him as offered by them with simple

interest at the rate of 10%.


25.          In the circumstances this appeal is allowed.      The Judgment and

order dated 10.2.2009 passed by the High court in R.S.A No. 1367 of 1996 and

that of the Sub-Judge, Pathankot in Civil Suit No. 138 of 1987 dated 3.10.1991

are set aside. The judgment and order dated 22.2.1996 passed by Addl. District.

Judge, Gurdaspur in Civil Appeal No. 203 of 1991 is confirmed. The suit filed by

the appellant No.1 bearing Civil Suit No. 138 of 1987 is decreed and it is declared
                                                                                                 17

that the appellant No. 1 is the owner of the suit house.                     There shall be a

permanent injunction restraining the defendants from alienating any part of the

suit house and forcibly interfering into the possession of the plaintiff of the house

in dispute.     In view of the offer given by the appellants to compensate the first

respondent, the appellants shall pay him the amount of Rs. 30,000/-(Rupees

thirty thousand only), with simple interest at the rate of 10% for the period from

13.4.1987 till the decision of the first appellate court i.e. 22.2.1996, within twelve

weeks from today, though it is up to the respondent No. 1 to receive the

amount. The interest is restricted upto 22.2.1996 for the reason that respondent

No.1 ought to have accepted the decision of the First Appellate Court,

particularly in view of the judgment of this Court in R. Rajagopal Reddy (supra),

and should not have dragged the appellants to the High Court in Second appeal.


26.           The first respondent will pay a cost of Rs. 10,000/- to the 1 st appellant

for this appeal.


                                                    ........................................J.
                                                    ( Dalveer Bhandari )


                                                    .........................................J.
                                                    ( H.L. Gokhale )

New Delhi



Dated: January 21, 2011