Penderlan v. Pender lan,
1948Present: Dias and Basnayake JJ.PENDERLA2SF, et al., Appellants, and PENDERDAJSr, RespondentS. C. 251-252—D. O. CUlaw, 11,937
Evidence—Sale of immovable-—Fictitious transaction—No consideration—Oral Evidence—Admissibility—-Evidence Ordinance-—Section 92.
The prohibition in section 92 of the Evidence Ordinance does notextend to a case where it is sought to prove that the transaction inquestion was a sham and that an instrument was-never intended to beacted upon.
y^ PPTCAT, from a judgment of the District Judge, Chilaw.
S. J. V. Chelvanayakam, K-G., with S. W- Jayaswriya, for the
3rd defendant appellant.
BASISTAYATCE J.—Penderlan v. Penderlcm
Cyril E. S. Per era, -with. Christie Seneviratne, for the 1st defendant. appellant.
N. E. Weerasooria, K.C., -with H. W. Tambiah and K. C. de Silva,for the plaintiff respondent.
Cur. adv. vult.
April 20, 1948. Basnatake J.—
The plaintiff is the sister of the first and second defendants and thesister-in-law of the third defendant. The fourth defendant is a stranger.The plaintiff asks that she be declared entitled to a fibre mill known as“ St. Antony’s Mills ” and that deed No. 925 dated May 15, 1941, attestedby H. H. A. Jayawardene, Notary Public, be set aside. The learnedDistrict Judge has given judgment for the plaintiff, and the first andthird defendants have appealed therefrom to this Court. The learnedDistrict Judge has accepted the evidence of the plaintiff and her witnessesand we see no reason to interfere with bis finding. According to thefacts as proved by the plaintiff, she received by way of gift from herfather dining his lifetime a land called Makullagahawatte. In 1935she constructed thereon a fibre mill at a cost of four thousand rupees.The second defendant was placed in charge of the mills. In 1936 thefirst defendant, having conceived the idea of applying for the post ofVidane Aratchi, asked the plaintiff to transfer to him her land, so that hemay have the necessary property qualification, promising to re-transferit within a month. Deed No. 10,423 of November 19, 1936, attestedby M. D. A. S. Gunasekera, Notary Public (exhibit PI), was accordinglyexecuted. The plaintiff’s mother, younger brother, and a child adoptedby the plaintiff’s father, were also parties to it, as they themselvestransferred certain lands to the first defendant for the same purpose.The transfer was made in the form of a conveyance for a considerationof Us. 5,000. Actually no consideration was paid, nor was there anychange in possession. The land transferred by the plaintiff was thusdescribed in the schedule :
“ The lands called Makulkarandagahawatta and the adjoiningKajugahawatta, situate at Kolinjadiya in "Ka.mma.l Pattu, PitigalKorale, Chilaw District of the North-Western Province, which aretogether bounded on the north by the garden formerly of NikulanFernando- and presently of Benedict Fernando and others, east byfield, south by village limit belonging to the heirs of Jappu Singho orpresently Dombagahawatt,a belonging to Medarlis Panderlan, westby the garden of Philippu Annavirala and others, containing in extentabout eighty-five coconut trees plantable soil together with the plantations and soil and the fibre mill called ‘ St. Antony's Mills ’ erectedthereon together vnth the machinery, tools and implements and the buildingsheld and possessed by the second named vendor under and by virtue ofdeed No. 34,734 dated May 8, 1917, attested by P. M. A. Fernando,Notary Public, and by the first named vendor upon the life interestreserved by the said deed ”.
The first defendant did not carry out his promise to re-transfer withina month. When pressed to do so, he asked the plaintiff to wait till hegot married. When he got married in 1940 he was again asked for
BASNAYAKE J.—Penderlan v. Pender Ian
the re-transfer and after some delay on May 17, 1941, he executed deedNo. 6,744 attested by T. P. M. F. Gunawardene, Notary Public (exhibitP2). The land in question is thus described in the schedule to that deed :" After excluding the fibre mills called ' St. Antony's Mills ’ togetherwith the fixtures and everything appertaining thereto on the land calledMakulkarandagahahena and the adjoining Kajugahawatte situateat Kolinjadiya in Kammal Pattu, Pitigal Korale, Chilaw District ofthe North-Western Province, and bounded on the north by the gardenformerly of Nikulan Fernando now of Benedict Fernando and others,east by field, south by the village limit belonging to the heirs of JappuSingho or presently Dombagahawatte belonging to Medarlis Panderlan,and west by the garden of Philippu Annavirala sCnd others and con-taining in extent about eighty-five coconut trees plantable soil togetherwith the plantations produce and everything appertaining theretowith the soil held and possessed by me the said vendor under and byvirtue of deed of transfer No. 10,423 dated November 19, 1936, attestedby M. D. A. S. Gunasekere, Notary Public
The plaintiff did not discover that the fibre mill had been excluded tillDecember 29, 1942, when the third defendant entered into possessionof the mills. Then it was that she came to know that the first defendanthad sold the fibre mill to the 3rd defendant by deed No. 925 of May 15,1941, attested by H. H. A. Jayawardene, Notary Public (exhibit’ P3),for a sum of Rs. 2,000. It is this last mentioned deed that the plaintiffseeks to have declared null and void.
It is clear from the plaintiff’s evidence that the transaction evidencedby exhibit PI was fictitious. Though it purported to be a sale it wasno sale at all for it lacked the essentials of such a transaction, for asHuber1 says:
“ He who under cloak of sale makes another contract, but for thesake of appearances pays a trivial amount by way of price, effectsno sale; ”.
Voet says the same thing (18.1.1) when he quotes with approval thefollowing statement from the digest:
“ ‘merely fictitious-sale is considered as null, and consequently theproperty in the thing which is the subject of it is not considered topass ’. That is to say, it is so far null that it cannot hold good as asale, because where a price is lacking ‘ a contract of purchase lacksits very essence 5 ”.
It has been argued that section 92 of the Evidence Ordinance precludesthe admission of the- evidence which the plaintiff has given as to thetrue nature of the transaction, and we have been referred by learnedcounsel to a number of decisions 2 of this Court in support of his submission.Those cases have no application to the present case. There is nothingin the provisions of section 92 of the Evidence Ordinance that precludesthe reception in evidence of the fact that no consideration was receivedby the vendor although the notary in his attestation says that the vendors
Huber’s “ Jurisprudence of My Time ”, Vot. I., p. 409.
(1913) 16 N.L. R. 368; (1946) 47 N, L. ft. 457; (1946) 47 N, L. R. 297 ; (1945) 46N.L.R. 213; 48 N. L. R. 289,"" "
BASNATAEB J.Penderlcm v. Penderlcm
declared in his presence that they received the consideration prior to theexecution of the deed. In the case of Sah Lai Ghand v. Indarjit1, LordDavey observes :
“ The point which was chiefly pressed on their Lordships by thelearned counsel for the appellant was also raised in the High Courtand considered by the learned judges—namely, that no evidenceshould have been received of the agreement alleged by the respondent,because it varied or contradicted the written contract, and was there-fore inadmissible under s. 92 of the Evidence Act. Their Lordships,agreeing with the High Court, regard it as settled law that, notwith-standing an admission in a sale deed that the consideration has beenreceived, it is open to the vendor to prove that no consideration hasbeen actually paid. If it was not so, facilities would be afforded for thegrossest frauds. The Evidence Act does not say that no statementof fact in a written instrument may be contradicted by oral evidence,but that the terms of the contract may not be varied, &c. The contractwas to sell for Rs. 30,000, which was erroneously stated to have beenpaid, and it was competent for the respondent, without infringing anyprovision of the Act, to prove a collateral agreement that the purchase-money should remain in the appellant’s hands for the purposes andsubject to the conditions stated by the respondent. This objection,therefore, fails
In the Allahabad Full Bench decision of Mohammad Taki Kahn v.Jang Singh*, Sulaiman C.J. explains the scope of section 92, thus :
" Section 92, Evidence Act, provides that where a contract has beenentered into between two parties and certain terms have been reducedto the form of a document, then neither party, with certain exceptions,can be allowed to go back upon the written document and eithercontradict, vary, add to or subtract its terms. Both parties must betied down to the agreement which they chose to reduce into writing.The exceptions are contained in the various provisions. The sectiontherefore prevents a party from varying the terms of the documentin a way which would be contrary to its plain language, but whereother evidence is sought to be produced in order to invalidate thedocument itself, then, of course, there is no prohibition because obviouslythe invalidation of a document is not a variation of its terms, butits very negation ”.
I agree with the view expressed by Sulaiman C.J. that the prohibitionin section 92 does not extend to a case where it is sought to prove that atransaction was a sham.
Apart from the principle laid down by the Privy Council in the caseI have cited above, the plaintiff was also entitled on the principle statedby Sulaiman C.J. to lead evidence of the fact that no considerationwas paid, and that possession -was not transferred to the vendee. Thefact that the vendee re-conveyed the lands though after some delay is alsoa circumstance the Court is entitled to look at. Conduct of parties isrelevant in such a case as this, when it is sought to prove that thedocument is fictitious and not what it purports to be. Evidence of theJ [1000) 27 L. R. 1. A. 93 at 97.2 [1935) A. I. R. Allahabad 529 at 532.
WINDHAM J.—In re De Silva
fact that an instrument was never intended to be acted upon is not.excluded by section 92. It has been so held in a number of decisionsof the Courts in India. This principle was first enunciated bySir Barnes Peacock in the Pull Bench case of Kasheenath Chatterjee v.Chundy Chum Barter) ee1 and followed in Calcutta Pull Bench case ofPreo Nath Saha v. Madhu Sudan Bhuiya2 and several other decisionssince, the most recent of which is Satyendra Nath Roy v. PramanandaHaidar 3.
The deed PI did not convey to the first defendant any title at all tothe plaintiff’s lands mentioned therein and the first defendant hadtherefore no right to exclude the fibre mill from his re-conveyance P2.The plaintiff has therefore rightly been declared-entitled to the fibremill. The first defendant had no right at any time to the fibre milland the third defendant can get no title thereto by deed P3. Thelearned District Judge has rejected the third defendant’s claim ofbona fides and has rightly made order setting aside deed No. 925 ofMay 15, 1941, attested by H. H. A. Jayawardene, Notary Public.
Por the reasons we have given the appeals are dimissed with costs.
Dias J.—I agree.
PENDERLAN, et al., Appellants, and PENDERLAN, Respondent