(Prayer: Appeal Suit filed under Section 96 read with Order XLI Rule 1 of the Code of Civil Procedure, 1908 against the Judgment and Decree passed by the learned IV Additional District Judge, Thiruvallur at Ponneri in O.S.No.3 of 2015 dated 23.03.2018.)

1. This Appeal Suit is directed against the judgment and decree dated 23.03.2018, passed by the learned IV Additional District Judge, Thiruvallur at Ponneri, in O.S. No. 3 of 2015, by which the suit filed by the plaintiff for recovery of money and damages was dismissed, and the parties were directed to bear their respective costs.

2. The appellant is the plaintiff; the respondents are defendants 2 and 3. The first defendant, Lakshmikanthammal, died during the pendency of the original suit, and defendants 2 and 3, already parties, were recognised as her legal representatives. For convenience, the parties are referred to by their rank before the trial Court.

3. The suit was filed for the recovery of Rs.10,21,975/-, comprising Rs.9,37,500/- alleged to have been paid under a registered Release Deed dated 27.11.2013 and Rs.84,475/- alleged to have been incurred towards stamp duty and registration charges. The plaintiff also claimed interest, Rs.5,00,000/- as damages for mental shock and agony, and costs.

4. Plaintiff's case: The plaintiff pleaded that the defendants, representing themselves as the absolute owners of the suit property, executed a registered Power of Attorney dated 29.09.2008 in favour of R.Pandurangan, son of Ramakrishnan.

5. The plaintiff further pleaded that all the defendants, through their Power of Attorney agent, R.Pandurangan, executed a registered Sale Deed dated 03.02.2010 in favour of the plaintiff for a consideration of Rs.3,75,000/- for land measuring 0.30 hectares (i.e.0.75 acres) in Survey No.504B/3B at Old Gummidipoondi Village and Taluk. 6. According to the plaintiff, after the purchase, one P.M.Nandagopal along with P.M.Vadivel sent a legal notice dated 09.05.2013 to the plaintiff as well as to the defendants’ power agent, R. Pandurangan. The notice stated that they had instituted O.S.No.20 of 1998 on the file of the Sub Court, Ponneri, for the partition of the suit property and other properties against the 1st defendant and others, and that a preliminary decree had been passed in their favour on 24.07.2009.

7. The plaintiff stated that he was not informed of the partition proceedings before the sale. On verification, he found the claim in the notice to be correct and called upon the defendants to rectify the defect in title. As the defendants did not do so, he approached P.M.Nandagopal and the legal heirs of the deceased P.M. Vadivel.

8. The plaintiff obtained a registered Release Deed dated 27.11.2013 from P.M.Nandagopal and the legal heirs of the deceased P.M.Vadivel for a consideration of Rs.9,37,500/-.

9. The plaintiff further contends that, due to the defendants' acts, he suffered heavy losses and expenses and was subjected to mental shock and agony. According to him, he was compelled to pay Rs.9,37,500/- to obtain the Release Deed dated 27.11.2013 from P.M.Nandagopal and others in respect of the suit property, and incurred a further sum of Rs.84,475/- towards stamp duty and registration charges. Thus, he claims a total sum of Rs.10,21,975/- from the defendants, in addition to Rs.5,00,000/- as damages for mental shock and agony. It is his further case that, as his vendors, the defendants were bound to clear the encumbrance over the suit property but failed to do so despite repeated demands.

10. The plaintiff issued a legal notice dated 18.08.2014 to all the defendants. Although the notice was acknowledged, the defendants neither replied nor complied with the demands. Accordingly, the plaintiff claims interest at 18% per annum from the date of suit. The suit has been valued at Rs.15,21,975/-, and the appropriate court fee has been paid. Accordingly, the plaintiff seeks recovery of Rs.10,21,975/- with interest, Rs.5,00,000/- in damages, costs of the suit, and other appropriate reliefs.

11. The second defendant, whose written statement was adopted by the 3rd defendant, denied the material averments of the plaint and contended that the suit is not maintainable. According to them, the plaintiff’s father, R.Pandurangan, their Power of Attorney Agent, had executed the sale deed in favour of his own son, the plaintiff, without their knowledge and without consideration. They further contended that the earlier partition proceedings relating to the suit property in O.S.No.20 of 1998 had not attained finality and that appeals in A.S.Nos.36 and 37 of 2013 were pending before the Principal District Court.

12. They denied that the plaintiff was compelled to obtain the Release Deed, dated 27.11.2013 for Rs.9,37,500/- and contended that the plaintiff had voluntarily approached P.M.Nandagopal and the legal heirs of P.M.Vadivel to perfect his alleged title. The defendants further submit that the suit property patta stands in the names of Lakshmikanthammal and the defendants, and that they are in exclusive possession and enjoyment of the suit schedule property. According to them, the plaintiff was never in possession and enjoyment of the suit property; the patta did not stand in his name; and the doctrine of lis pendens applied to his purchase. They also contended that the releasors had no right, title, or interest in the suit property and, therefore, the Release Deed was void ab initio and unenforceable.

13. The defendants further contended that there was no agreement or obligation on their part to reimburse any amount allegedly spent by the plaintiff under the Release Deed, and that the plaintiff, having voluntarily obtained the deed, must bear the burden. On these grounds, they denied liability to pay any amount or damages to the plaintiff and prayed for dismissal of the suit with exemplary costs.

14. On the pleadings, the trial Court framed the following issues:

                     (i) Whether the plaintiff is entitled to a sum of Rs.10,21,975/- paid to the Releasees under the Release Deed dated 27.11.2013 and the expenses incurred towards stamp duty and registration?

                     (ii) Whether the plaintiff is entitled to a sum of Rs.5,00,000/- towards damages?

                     (iii) To what relief if any the plaintiff is entitled to?

15. The plaintiff examined himself as P.W.1 and marked Exs.A1 to A9. Ex.A1, dated 03.02.2010, is the certified copy of the registered Sale Deed executed by the defendants through their Power Agent in favour of the plaintiff; Ex.A2, dated 29.09.2008, is the certified copy of the registered Power of Attorney executed by the defendants in favour of R.Pandurangan; Ex.A3, dated 09.05.2013, is the copy of the legal notice issued on behalf of P.M.Vadivel and others to the plaintiff; Ex.A4, dated 24.07.2009, is the copy of the decree in O.S.No.20 of 1998 on the file of the Sub Court, Ponneri. Ex.A5, dated 27.11.2013, is the registered Release Deed executed by P.M.Nandagopal and others in favour of the plaintiff. Ex.A6, dated 18.08.2014, is the copy of the pre-suit legal notice issued by the plaintiff to the defendants, while Exs.A7 to A9, dated 21.08.2014, are the postal acknowledgements. On the defendants' side, the second defendant, Thiripurasundari, was examined as D.W.1. Ex.B1, dated 14.07.2014, is a photocopy of the registration copy of the Sale Deed executed by P. Vinoth in favour of Dr C.K. Mallikarjunan, covering the suit property along with other properties.

16. On considering the pleadings and evidence, the trial Court held that the Power of Attorney authorised R.Pandurangan not only to sell the property but also to attend to litigation. Referring to a recital in Ex.A1, it held that the Power Agent had personally undertaken to clear any future encumbrance from his own resources, and that he was therefore a necessary and proper party.

17. The trial Court further held that Ex.A3 notice dated 09.05.2013 disclosed steps regarding an appeal against the preliminary decree and the pendency of final-decree proceedings. It found that the plaintiff ought to have awaited the outcome of those proceedings or to have sought an equitable remedy in O.S.No.20 of 1998, rather than obtaining Ex.A5 Release Deed, dated 27.11.2013.

18. The Trial Court observed that the property conveyed under Ex.A1 was one of several items in O.S.No.20 of 1998 and held that the purchase and the subsequent Release Deed were affected by lis pendens. The Trial Court further observed that, as evidenced by Ex. B1, the plaintiff had sold the suit property to Dr.C.K.Mallikarjunan on 14.07.2014, whereas the present suit was instituted only on 23.12.2014. Thus, even before the suit was instituted, the plaintiff had parted with the suit property and ceased to have any right or title therein. The Trial Court also noted that the plaintiff had not disclosed in the plaint that R.Pandurangan, the Power Agent through whom he purchased the property, was his father. It was further observed that the rights over the property were subject to the outcome of the appeal arising from the preliminary decree passed in O.S.No.20 of 1998.

19. In these circumstances, the Trial Court held that the plaintiff was not entitled to recover the consideration or the stamp and registration charges he had incurred to obtain the Release Deed from P.M.Nandagopal and others. It further held that, having already alienated the property, the plaintiff was not entitled to claim Rs.5,00,000/- in damages for alleged mental agony. Accordingly, the issues were answered against the plaintiff, and the suit was dismissed, with both parties to bear their respective costs.

20. Aggrieved by the judgment and decree dated 23.03.2018 in O.S.No.3 of 2015, which dismissed the suit, the plaintiff has preferred the present appeal. The plaintiff contends that the Trial Court went beyond the pleadings and evidence, particularly in holding that R.Pandurangan was a necessary party and that the plaintiff ought to have proceeded against him. According to the plaintiff, R.Pandurangan acted only as the defendants' Power Agent under Ex. A2 and executed the Sale Deed, Ex. A1, in that capacity. It is further contended that the Trial Court failed to properly apply the principles governing the relationship of principal and agent and the obligation of a vendor to convey the property free from encumbrance. The plaintiff asserts that the defendants, despite being parties to O.S.No.20 of 1998, had not disclosed the pendency of the said partition proceedings either before the execution of Ex. A2 or before the sale in favour of the plaintiff.

21. The plaintiff further relies on D.W.1’s admissions that the entire consideration had been received, that no amount was due, that she had no objection to the Power Agent selling the property to the plaintiff, and that no documentary evidence was produced to show that either the plaintiff or R.Pandurangan had knowledge of the earlier suit. It is also contended that the defendants neither repudiated Ex.A1 nor replied to the pre-suit notice under Ex.A6. According to the plaintiff, obtaining the Release Deed under Ex. A5 was necessary to perfect his title, and the amounts thereunder were paid by Demand Draft; hence, the subsequent sale under Ex. B1 would not extinguish his accrued right to recover the expenditure incurred in perfecting the title. The plaintiff also challenges the application of the doctrine of lis pendens as a defence available to the vendors and contends that Ex. B1, which had not been pleaded in the written statement, ought not to have been relied upon to reject the monetary claim. The plaintiff further challenges the rejection of the claim for damages for mental agony and ultimately seeks the setting aside of the judgment and decree of the Trial Court, and the decree of the suit, as prayed for.

22. The learned counsel for the appellant/plaintiff would submit that the suit property was purchased from the defendants through their duly constituted Power Agent for valuable consideration, and that the entire sale consideration had been received by the defendants, as admitted by DW-1 in her cross-examination. According to the plaintiff, at the time of purchase, he was not informed of the pendency of O.S.No.20 of 1998 for partition or of the preliminary decree passed therein, and there is no evidence that either the plaintiff or the Power Agent knew of the said proceedings. It is therefore contended that the defendants, as vendors, were under an obligation to disclose any existing defect or encumbrance in title and to convey a good and marketable title.

23. It is further submitted that, upon learning of the partition proceedings from the notice issued by the parties therein, the plaintiff was compelled to obtain the Release Deed under Ex.A5 and to incur expenditure on the consideration paid to the releasors, stamp duty and registration charges to perfect his title. The learned counsel therefore contends that the amounts so necessarily incurred are recoverable from the defendants. According to him, the fact that the plaintiff subsequently sold the property would not affect the maintainability of the present suit, since the relief claimed is not a declaration of title, but recovery of money incurred to cure the defect in title. The learned counsel for the appellant further submitted that the plaintiff was not required in law to wait indefinitely for the finality of the preliminary decree or for completion of the final decree proceedings in O.S.No.20 of 1998. The learned counsel also challenges the finding regarding the non-joinder of the Power Agent, contending that no such plea was specifically raised in the written statement, nor was any issue framed in that regard.

24. The learned counsel relied on Section 55 of the Transfer of Property Act, 1882, particularly the vendor's obligation to disclose material defects and to discharge existing encumbrances, and the implied covenant under Section 55(2) that the interest professed to be transferred subsists and that the seller has power to transfer the same. In support of these submissions, reliance was placed on Bhagawati and another v. Banarsi Das and others, Vol. LV Indian Appeals, p. 135, where it was held, in the context of an undisclosed prior mortgage, that the vendor is bound, in the absence of a contract to the contrary, to discharge existing encumbrances, and that a purchaser compelled to discharge an obligation the vendor was bound to satisfy is entitled to reimbursement; reference was also made to Section 69 of the Indian Contract Act, 1872. Reliance was also placed on the decision Gouri Shankar prasad vs Ram kishun Dass & others, reported in AIR 1974 Patna 319, paras 8 and 9, for the proposition that Section 55(2) of the Transfer of Property Act imports an implied covenant and an absolute warranty of title and of the seller's power to transfer, and that the purchaser's knowledge of a defect in the vendor's title does not by itself exclude such warranty. In that decision, reference was made to Sheokumar Tewari v. Central Co-operative Bank, Dinapur, reported in AIR 1947 Pat 447; M.T. Lakhpat Kuer v. Durga Prasad, reported in AIR 1929 Pat 388; and Nawal Kishore v. Sarju, reported in AIR 1932 All 546.

25. The learned counsel further relied upon the judgment Jaswant Rai vs Abnash kaur, reported in SCC OnLine Delhi 689, for the proposition that pending litigation and attachments affecting the property constitute material defects which the vendor is bound to disclose; that non-disclosure of such material defects may amount to fraud within the meaning of Section 55(1)(a) of the Transfer of Property Act read with Sections 17 and 18 of the Indian Contract Act; and that a purchaser cannot be compelled to accept a title which exposes him to litigation or reasonable doubt. It was also relied upon for the proposition that the covenant of good title is implicit in a sale and, where expressly incorporated, cannot be contradicted by oral evidence, having regard to Section 92 of the Evidence Act.

26. In the above submission, the learned counsel for the appellant/plaintiff prayed for the appeal to be allowed and for the suit to be decreed as prayed.

27. The learned counsel for respondents/defendants supported the judgment and decree of the Trial Court. He submitted that R.Pandurangan, the father of the plaintiff and the defendants' Power Agent, had caused the Sale Deed to be executed in favour of his own son without the defendants' knowledge and without payment of consideration. Therefore, the plaintiff could not be treated as a bona fide purchaser. It was further contended that, under the Power of Attorney, Pandurangan himself had undertaken responsibility for clearing any encumbrance over the property. Therefore, any liability, if any, could not be fastened upon the defendants. According to the defendants, there was no agreement or promise on their part to reimburse any amount allegedly paid under the Release Deed, which, they say, was brought about through collusion among the plaintiff, his father, and the releasors. It was also submitted that R.Pandurangan, against whom the plaintiff ought to have proceeded, had not been impleaded as a party to the suit.

28. The learned counsel for the respondents/defendants further submitted that O.S.No.20 of 1998 culminated only in a preliminary decree and that, before the final decree was passed, the present proceedings were instituted. It was also submitted that A.S.Nos. 36 and 37 of 2013 were pending and, therefore, the rights claimed by the releasors under Ex.A5 had not attained finality. According to the respondents/defendants, both Ex.A1 Sale Deed and Ex.A5 Release Deed were subject to the doctrine of lis pendens. It was further contended that the plaintiff had never been in possession and enjoyment of the suit property and that, having already alienated the property under Ex. B1 before the institution of the suit, he was not entitled to maintain the present claim for reimbursement or damages. On these grounds, the learned counsel prayed for dismissal of the appeal.

29. The following points arise for consideration in this appeal:

                     1. Whether the plaintiff knew of the pending litigation concerning the property he purchased from the defendants through his father, who held their power of attorney?

                     2. Whether the plaintiff is entitled to recover from the defendants the amount he paid to the executants of the release deed, Ex. A5, together with the expenses incurred in its registration?

                     3. Whether the plaintiff is entitled to Rs.5,00,000/- as damages for mental agony?

                     4. Whether the judgment and decree of the trial court are liable to be set aside?

Point Nos. 1 and 2

30. The plaintiff is the son of the defendants' power agent. The plaintiff and his father live together and are engaged in the real estate business. The suit property, measuring 0.75 acres and comprised in S.No.503/B3, was allotted to Subramani Chettiar, the husband of the first defendant, under a family partition deed dated 01.01.1970. Subramani Chettiar died intestate, leaving his wife, the first defendant, and his mother, Kanniammal, as his legal heirs. Kanniammal subsequently died. These facts are admitted and are also set out in the power deed, Ex. A2, dated 29.09.2008.

31. The principal contention of the plaintiff is that the defendants/vendor concealed the existence of the two brothers of the deceased Subramani Chettiar, namely (i) Nandagopal and (ii) Vadivel, who inherited their mother Kanniammal's half share in the properties left by Subramani Chettiar.

32. Ex. A2, the power deed, contains a recital authorising the power agent, if the need arises, to appear before the Court and engage an advocate in respect of the property. Further, as noted by the trial Court, Ex. A1, the sale deed, contains a significant recital that the power agent would, at his own cost, rectify any encumbrance affecting the property conveyed thereunder. These recitals are relevant considering the plaintiff's plea that neither he nor his father knew of the pending litigation.

33. D.W.1 deposed that the litigation relating to the property had been disclosed to the power agent. Significantly, the plaintiff did not examine his father, the power agent, to rebut this evidence. Ex. A2 is silent as to whether the pending litigation had been disclosed to the agent. Therefore, the oral evidence of D.W.1 regarding such disclosure does not contradict or vary the terms of Ex. A2 and is not barred by Sections 91 and 92 of the Indian Evidence Act, 1872. In the absence of any rebuttal evidence, and having regard to the surrounding circumstances, the testimony of D.W.1 is found to be trustworthy and acceptable.

34. The plaintiff has also failed to disclose in the plaint that the defendants' power agent is his father. Further, the plaintiff's father had obtained a power of attorney in respect of the property situated on the southern side of the property covered under Exs.A1 and A2, comprised in S.No.504B/2B. Ex.A2 itself sets out the defendants' title. The plaintiff, being engaged in the real estate business, cannot readily be believed when he states that he purchased the property through his father, without verifying the legal heir particulars of the deceased, Subramani Chettiar. Taken cumulatively, the evidence and circumstances establish that the plaintiff had knowledge, through his father/power agent, of the litigation affecting the property. Point No.1 is therefore answered against the plaintiff.

35. According to the plaintiff, only after receiving the legal notice from the persons who subsequently executed the release deed did he verify the facts and, upon finding their claim correct, enter into an arrangement with them. Pursuant thereto, the Release Deed, Ex. A5, was executed on 27.11.2013. However, after receipt of the legal notice, Ex.A3, dated 09.05.2013, the plaintiff ought first to have called upon the defendants and their power agent to rectify the alleged defect in title. Instead, without notice to them and without allowing them to remedy the situation, the plaintiff, on his own, entered into an arrangement with the executants of Ex.A5 and paid the consideration recited therein. The defendants cannot be held liable for an arrangement that the plaintiff unilaterally entered with the releasors.

36. Ex.A4 is the decree dated 24.07.2009 passed in O.S.No.20 of 1998. The property covered by Exs.A1 and A2 forms item No.37 among the 40 items dealt with in that proceeding. The defendants had preferred an appeal, and there remained a possibility of seeking appropriate equitable relief in the final-decree proceedings. In such circumstances, the plaintiff, without prior notice to the defendants, obtained Ex. A5 and paid consideration to the releasors, incurring incidental registration expenses. The defendants cannot be saddled with liability for expenditure so incurred unilaterally. Accordingly, the plaintiff is not entitled to recover from the defendants either the consideration paid to the releasors under Ex. A5 or the expenses incurred for its registration. Point No.2 is answered against the plaintiff.

Point No.3

37. The plaintiff claims Rs.5,00,000/- as damages for mental agony. However, there is no evidence to substantiate this claim. The plaintiff is engaged in the real estate business, and the purchase and sale of properties are part of his business activities. The property was purchased under Ex.A1 for a sale consideration of Rs.3,75,000/- and was subsequently sold under Ex.B1 for Rs.37,50,000/-, i.e., ten times the purchase price. Notably, the sale under Ex.B1 was effected on 14.07.2014, even before the institution of the present suit on 23.12.2014. Section 73 of the Indian Contract Act, 1872 permits compensation for loss or damage caused by a breach that naturally arose in the usual course of things, or that the parties knew, when they made the contract, to be likely to result from such breach; compensation is not payable for remote or indirect loss. In the present case, the plaintiff, without first allowing the defendants to address the alleged defect, acted unilaterally. There is thus no basis to award damages for mental agony. Point No.3 is answered against the plaintiff.

Point No. 4

38. In view of the findings on Points Nos. 1 to 3, no ground is made out to interfere with the judgment and decree of the trial Court. The same are accordingly confirmed. In the result, the Appeal Suit is dismissed. There shall be no order as to costs. Consequently, any connected miscellaneous petitions, if any, are closed.