Transfer of Property:
Exchange of property – Propriety of – Property donated to school run by Education Society – For the specific purpose of advancing the cause of education of children – The then Principal of the School exchanged the land of the School (including the donated land) with his own land situated in another village – Thereafter the Principal leased the exchanged land to the School – Suit by the donor seeking possession and in the alternative seeking declaration that the exchange was illegal – Trial court denied decree of possession while granted the alternative relief declaring the exchange as illegal – First Appellate Court held that the donor had no locus standi to agitate the matter after having executed the Gift Deed – High Court in Second Appeal, affirmed the order of First Appellate Court – Appeal to Supreme Court – Held: The appellate courts wrongly confined their discussion to the prayer for declaration for possession – Trial Court rightly decreed the suit on alternative prayer as the purported exchange was collusive, illegal and unauthorized – The Jamabandis reflecting the purported exchange are quashed and set aside – Cost of Rs. 1 lac imposed. Allowing the appeals, the Court
HELD: 1.1 It has been erroneously held that the mutation entries for exchange by Respondent No.1 was valid. The purported oral exchange dated 01.08.1988, followed by the Agreement dated 25.08.1988, between the then Principal of the School, with the President of the School, was a wholly collusive and illegal transaction. The exchange was illegal and unauthorized, since there was no Resolution passed by the Education Society, which was running the school, in favour of the President to exchange the land owned and vested in the School pursuant to the Gift Deed. The Principal and the President of the school entered into this collusive transaction, whereby the then Principal became the owner of the suit property. The school could not have been divested of the ownership of the suit property by the socalled exchange. This was in complete breach of faith and trust by the President of the Society and Principal of the School. [Paras 4.1 and 4.2] [241-B; E-H]
1.2 The so-called exchange was a mere ruse to transfer the valuable land of the School which had been gifted by the mother of the appellants, to the Principal, in exchange for some unirrigated inferior quality banjar land situated in a remote corner in a Village. Once the School was divested of ownership on the basis of the purported exchange, the respondents executed a Lease Deed in favour of the School, wherein the School was now shown as a Lessee, and was required to pay lease rent to the Principal and later his legal heirs. The purported exchange dated 01.08.1988 and 25.08.1988 being wholly illegal, is liable to be quashed and set aside. The Jamabandis reflecting the purported exchange are quashed and set aside. The Jamabandis be restored by the revenue authorities in the name of the School. [Paras 4.3 and 5] [242-C-E]
2. Even though, the appellants/plaintiffs had prayed for a decree of possession of the land which had been gifted to respondent No. 2-School; there was an alternate prayer made for a decree of declaration that the School was the owner in possession of the land which had been gifted to it, and that the mutation of exchange was illegal, unlawful, and liable to be set aside. The Trial Court had rightly decreed the suit on the alternate prayer. The First Appellate Court and the High Court confined their discussion only with respect to the prayer for declaration for possession of the suit property. [Para 4.1] [241-B-D]
As published in the Supreme Court Reports, Supreme Court of India. Text from the Indian Supreme Court Judgments open data set (Dattam Labs), CC BY 4.0.
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