Gurbaksh Singh vs Nikka Singh

Rewritten Version Notice: This is a rewritten version of the original judgment.

Court: Supreme Court of India

Case Number: Civil Appeal No. 128 of 1960

Decision Date: 14 September, 1962

Coram: Syed Jaffer Imam, N. Rajagopala Ayyangar, J.R. Mudholkar, Subba Rao

In the matter titled Gurbaksh Singh versus Nikka Singh, the Supreme Court of India delivered its judgment on the fourteenth day of September in the year 1962. The bench that heard the case comprised Justice Syed Jaffer Imam, Justice N. Rajagopala Ayyangar and Justice J. R. Mudholkar. The petition was filed by Gurbaksh Singh as the petitioner and the respondent was Nikka Singh. The citation for the decision appears as 1963 AIR 1917 and 1963 SCR Supplement No 1 at page 55. The legal issues involved a second appeal under the provisions that allow a higher court to intervene where the first appellate court failed to make a finding on the question of title, an interference by the High Court with a corrected entry in the revenue records, the presumption of correctness attached to such entries, and the application of sections 100 of the Code of Civil Procedure of 1908, and sections 37 and 44 of the Punjab Land Revenue Act of 1887.

The factual backdrop of the case concerned two co‑sharers, Teja Singh and Jhandha Singh, who owned a tract of agricultural land. Upon partition, Teja Singh was allotted one share while Jhandha Singh received seven shares, and each applied to the revenue authorities for a mutation of title reflecting their respective portions. By mistake, the mutation entered the entire land in the name of Teja Singh. When the error was discovered, Jhandha Singh applied for a correction of the revenue entry. During the pendency of those proceedings Teja Singh died, and his brother and legal heir, Mula Singh, sold the whole parcel to the appellant, Gurbaksh Singh. Mula Singh subsequently appeared before the revenue authorities, admitted that the original mutation was erroneous, and the authorities, relying on his admission and on a report of an enquiry made by a subordinate revenue officer, corrected the entry to show the proper shares of one‑eighth to Teja Singh and seven‑eighths to Jhandha Singh. The appellant then instituted a suit seeking a declaration that he held exclusive title to the land. The trial court decreed in favour of the appellant, holding that the corrected mutation entry, which was effected after Mula Singh had already transferred the property, was not properly made. On appeal, the first appellate court affirmed the decree, describing the appellant as a bona‑fide purchaser in good faith, yet it did not render any explicit finding on the issue of title. The matter then proceeded to a second appeal before the High Court, which reversed the prior findings and dismissed the appellant’s suit. The appellant contended that the High Court lacked jurisdiction to set aside the concurrent findings of fact in a second appeal and that no presumption of correctness could arise in favour of the corrected entry. The Supreme Court held that the High Court was justified in interfering because the first appellate court had failed to make a finding on title. It further observed that the finding of the appellant’s status as a bona‑fide purchaser was unsupported by evidence, and that the burden of proof lay on the transferee to demonstrate that the transferor was the apparent owner. The Court noted that the appellant possessed full knowledge of the defect in Mula Singh’s title. The Court also affirmed that a presumption under section 44 of the Punjab Land Revenue Act arose in favour of the corrected entry, as the entry had been made in accordance with law. Section 37, the Court explained, authorised such an entry when it was based on facts that were either proved or admitted to have occurred. Though Mula Singh’s

In this matter the Court held that an admission offered after a party had already relinquished his interest in the land could not be taken as reliable evidence. The entry recorded in the revenue registers was said to have been made in accordance with the facts that had been proved before the revenue authorities, as set out in the report of a subordinate revenue officer, which also reproduced the terms of the partition of the co‑sharers. Because the appellant presented no evidence to overturn the presumption created by that entry, the presumption remained unrebutted. The judgment was rendered under the civil appellate jurisdiction in Civil Appeal No. 128 of 1960. The appeal was taken by special leave from the judgment and decree dated 4 November 1955 of the Punjab High Court in RSA No. 493 of 1950. Counsel for the appellant were K. C. Sarpal, S. K. Mehta and K. L. Mehta, while counsel for respondent No. 1 were Anant Ram Whig and J. B. Agarwal. The judgment was delivered on 14 September 1962 by Justice Subba Rao. This appeal challenged the High Court’s decision in the second appeal numbered 493 of 1950, which had set aside the order of the Subordinate Judge, Amritsar, who had confirmed the decree of the Revenue Officer, Amritsar, in favour of the appellant.

The subject of the appeal was a parcel of land measuring nine kanals and two marlas, bearing Khasra numbers 292 and 296 in the mauza of Kot Syed Mahmud in the District of Amritsar; the same land had previously been identified by Khasra numbers 324 and 328. The land formed part of a larger tract originally owned by several co‑sharers, among them Teja Singh and Jhandha Singh. A partition among these co‑sharers was effected, and on 20 April 1929 an application was filed before the revenue authorities seeking mutation of the titles in accordance with the terms of the partition. The petition, marked as Exhibit D‑6, bore the signatures of all the co‑sharers, including Teja Singh and Jhandha Singh, and stipulated that, with respect to the said Khasra numbers, one share should be entered in the name of Teja Singh and seven shares in the name of Jhandha Singh. Although this arrangement was not admitted, the mutation entered on 26 August 1929 (mutation number 960) recorded the entire extent of the Khasra numbers in the name of Teja Singh alone. When Jhandha Singh discovered the mistake on 10 August 1934, he applied to the revenue authorities for correction. The authorities investigated the matter from that date until 31 October 1935. The enquiry record shows that Mula Singh, the brother and heir of the deceased Teja Singh, admitted the error before the authorities. In addition, the authorities possessed a report prepared by a subordinate revenue officer that traced the history of the Khasra numbers and set out the relevant facts, namely the partition among the co‑sharers and the joint application filed by them for mutation of their names concerning the allotted plots.

After reviewing the material placed before them, the revenue authorities corrected the earlier mistake and entered mutation number 1490, recording the proper shares of Teja Singh and Jhandha Singh as one‑eighth and seven‑eighths respectively. On 24 October 1934, which was after Jhandha Singh had filed his application for correcting mutation number 960, Mula Singh executed a sale deed transferring the land bearing Khasra numbers 324 and 328 to Gurbaksh Singh, the appellant. The execution of this deed occurred on the very day that Mula Singh was required to appear before the revenue authorities. The appellant secured a security bond from Mula Singh to protect himself against any loss that might arise in respect of the property, and the appellant paid the majority of the purchase price on 22 October 1937, three years after the deed was executed. Subsequently, Jhandha Singh sold his seven‑eighths share in the same Khasra numbers, together with other interests, to Gopal Singh. From Gopal Singh, Nikka Singh, the first respondent, acquired that share by a sale deed dated 27 October 1936.

The appellant then instituted a suit under section 117 of the Punjab Land Revenue Act, 1887, in the revenue court seeking a declaration that he held exclusive title to the two Khasra numbers. The defendants in that suit were Nikka Singh, the first respondent, and Muta Singh, the second respondent. The suit proceeded through a complex course, the details of which need not be traced here. It is sufficient to note that the case was transferred to the Subordinate Judge’s file on 14 February 1949 by the District Judge after the High Court had earlier remanded it. The Subordinate Judge expressed his view on the central question as follows: “…so far as the land in suit is concerned, Mula Singh had sold it to the plaintiff on 24th October, 1934, and any admission by him made on 10th August, 1936 would not affect the plaintiff. Under Section 37 of the Land Revenue Act, a mutation can be based either on facts proved or admitted. No facts had been proved before the Officer who attested mutation No. 1490, and Mula Singh was nobody to admit any facts in relation to land which he had sold two years before to the plaintiff. The mutation entry 1490 was therefore not properly made and I decide issue No. 11 accordingly.” From these observations it is clear that the Subordinate Judge based his finding on the premise that Mula Singh’s later admission could not bind the appellant, who had purchased the property before that admission, and that mutation entry 1490 was invalid. On appeal, the learned District Judge, while offering some observations that indicated his line of thought, did not render a definitive finding on the title issue and consequently dismissed the appeal.

The Court noted that the lower court had determined the appellant to be a bona‑fide purchaser who acted in good faith. The first respondent then filed a second appeal before the High Court. The High Court held that the correction of the earlier mutation entry numbered 960 had been made with the consent of both parties and that a presumption of correctness attaches to the later mutation. It further observed that the appellant was fully aware of the true situation, namely that Mula Singh possessed only one‑eighth of the share in the specified Khasra numbers. On that basis, the High Court set aside the decree of the learned Subordinate Judge and dismissed the plaintiff’s suit with costs awarded throughout. Consequently, the present appeal was lodged.

Counsel for the appellant raised two principal points before this Court. First, it was submitted that the High Court possessed no jurisdiction under sections 100 and 101 of the Code of Civil Procedure to set aside concurrent findings that had been arrived at by the two lower courts. Second, it was contended that under section 37 of the Punjab Land Revenue Act a presumption favours an entry in the revenue record only when it is made in accordance with facts that have been proved or admitted as having occurred. In the present case, however, the entry had been corrected on the basis of Mula Singh’s admission after he had transferred his interest to the appellant; that admission therefore could not constitute a legal basis for the entry, and consequently no presumption under section 37 should apply.

The appellant’s counsel also referred to a 1931 decision of the Privy Council, which held that the High Court had no jurisdiction to entertain a second appeal on the ground of erroneous findings of fact, however gross the error might appear. That ruling has been followed by all Indian courts and has been accepted by this Court in numerous decisions. Nevertheless, it was emphasized that the learned District Judge had not made any determination on the question of title; he had merely disposed of the appeal on the ground that the appellant had purchased the land in good faith from Mula Singh. Since the question of title remained open, the High Court was rightly entitled to make its own finding on that issue.

The counsel further argued that the District Judge’s finding that the appellant was a bona‑fide purchaser in good faith was not grounded in the evidence before the court but was an ipso‑dixit. Moreover, the District Judge had failed to consider the effect of section 41 of the Transfer of Property Act on the facts. A finding reached without evidence and without applying the correct legal principles could not bind the High Court. Section 41 of the Transfer of Property Act provides: “Where, with the consent, express or implied, of the persons interested in immoveable property, a person is the ostensible owner of such property and transfers the same for consideration, the transfer shall not be voidable on the ground that the transferor was not authorised to make it: provided that the transferee, after taking reasonable care to ascertain that the transferor had power to make the transfer, has acted in good faith.”

The Court explained that Section 41 of the Transfer of Property Act provides that a transfer made by a person who is not authorized to do so will not be voidable if the transferee, after taking reasonable care to determine that the transferor had authority, acted in good faith. The general principle underlying property law is that a person cannot convey a better title than the title he himself possesses. Section 41 is expressly described as an exception to that principle, and consequently the burden of proof falls on the transferee to demonstrate that the transferor was the apparent owner of the land and that the transferee, having exercised reasonable care, acted in good faith. In the present matter the factual circumstances were plainly apparent and they established beyond any doubt that the appellant was aware that the title of his seller, Mula Singh, was contested and that the appellant knowingly assumed the risk of purchasing such a disputed interest. Both the appellant and Mula Singh were residents of the same village, Kot Syed Mahmud, and the sale was effected on the very day that Mula Singh was required to appear before the revenue authorities. Although the deed of sale was executed on 24 October 1934, the purchase price was not actually paid until three years later, on 22 October 1937. Moreover, the appellant secured a bond from Mula Singh to indemnify himself against any loss that might arise from defect in the title of the property in dispute. These factual details demonstrate that the appellant possessed knowledge of the defect in Mula Singh’s title and therefore it was impossible to conclude that he acted as a purchaser in good faith.

The High Court, after considering the foregoing circumstances, held that the appellant was conscious that the transaction pertained to a property whose title was highly doubtful. The Court further observed that no permissible ground existed for challenging that finding before this Court in an appeal filed under Article 136 of the Constitution. The Court also rejected the contention that no presumption could be drawn in favour of the correctness of the contested entry in the revenue record because the conditions of the relevant statutory provision were not satisfied. Section 37 of the Punjab Land Revenue Act provides that entries in records of rights or in annual records, except those made by patwaris under clause (a) of Section 35 concerning undisputed acquisitions, may be altered in subsequent records only by (a) making entries that correspond to facts proven or admitted to have occurred, or (b) making entries agreed to by all interested parties or supported by a decree or order binding on those parties. Section 44 further states that an entry made in a record of rights in accordance with the law then in force, or in an annual record pursuant to the provisions of the Chapter and its rules, shall be presumed to be true until it is rebutted by proof or until a new entry is lawfully substituted.

In this case, the Court explained that if entry number 1490, which replaced entry number 960, had been made in strict compliance with section 37 of the Punjab Land Revenue Act, a legal presumption would arise that the newer entry had been lawfully substituted for the older one. Under that presumption the older entry would be required to yield to the newer entry, although the presumption could be rebutted by clear evidence. The counsel for the appellant argued that Mula Singh, having transferred his interest in the property, could not have accepted the correctness of the new entry or agreed to the correction of the old entry in a manner that would bind a purchaser. The Court, however, found that this argument did not succeed because, after examining the record, it was satisfied that mutation entry 1490 had been entered on the basis of facts that had been proved before the revenue authorities. The evidence before those authorities included, among other things, the testimony of Mula Singh and the report of the subordinate revenue officer accompanied by all related annexures, notably Exhibit D‑6, which set out the terms of the partition. Relying on that evidence, the revenue authorities corrected the entry in the manner they did. Consequently, the Court held that the requirements of section 37(a) of the Punjab Land Revenue Act had been fulfilled, giving rise to the presumption that the later entry was correct. The appellant offered no evidence to overturn that presumption. Moreover, Exhibit D‑6 contained an application dated 20 April 1929 for the mutation of names in the revenue record, signed by all co‑sharers, and it recited that entries for the specified Khasra numbers could be made in the name of Teja Singh, co‑sharer number five holding one share, and Bhai Jhandha Singh, co‑sharer number two holding seven shares. The Court concluded that the High Court was correct in finding a presumption in favour of the correctness of the entry and that the appellant had failed to rebut it. Accordingly, the judgment of the High Court was affirmed, the appeal was dismissed with costs, and the appeal was formally dismissed.