T. Heerachand and another vs Saraswathy Ammal (deceased) and others

The plaintiffs are the appellants.

The plaint averments are as follows:

The plaintiffs had purchased certain properties (hereinafter referred to as the Properties) under two sale deeds dated 14.4.1971 for valid

consideration. The properties had been the subject matter of attachment in execution of a decree in O.S.No.59 of 1956 on the file of the Sub

Judge, Cuddalore obtained by South Arcot District Co-operative Supply and Marketing Society, Limited (hereinafter referred to as the Society

against one Thirupulisami Naidu, who along with his sons had sold the property to the plaintiffs. The defendants are his daughters-in-law, daughter

and sons. The vendor of the plaintiffs had informed them at the time of the sale deed that in the appeal filed against the decree in O.S.No.59 of

1956 the High Court had asked him to execute a security bond-as a condition for granting stay. The security bond was executed on 26.7.1958.

The vendor had represented to the plaintiffs that apart from the security bond, there was no encumbrance on the suit property. The plaintiffs,

believing the representations of the vendors, paid the entire consideration and took the sale deeds. Thereafter, the appeal was finally disposed of

and the Society viz., the decree holder brought the suit properties for sale in E.P.No.211 of 1963. Since, the vendors did not take any steps to

avert the sale, the plaintiffs had to periodically pay money into court in the E.P. proceedings totalling Rs.12,000. Subsequently, the properties came

to be sold in court auction. Thereupon, the plaintiffs filed an application under O.21, Rule 89, C.P.C. to set aside the sale. The sale was set aside

upon the plaintiffs depositing a sum of Rs.1,02,760. If they had not deposited it, the plaintiffs would have lost the properties. The plaintiffs had

retained the sum of Rs.15,000, out of which, a sum of Rs.1,000 had been paid to said Thirupulisami Naidu and his sons and Rs.12,000 was

periodically paid in the E.P. proceedings. The balance due was Rs.2,000 out of Rs.15,000. Thirupulisami Naidu and the sons filed a suit for

recovery of the said sum which was O.S.No. 154 of 1974 and the suit was dismissed. While dismissing the suit, the Sub Judge, Cuddalore found

that the plaintiff''s vendor had not disclosed all the encumbrances and defects on the Properties and the plaintiff had parted with Rs.1,41,760 for no

fault of theirs and that morally as well as legally, the plaintiff''s vendors were bound to indemnify the plaintiff atleast to the extent of the amount

retained under the sale deeds. Thereafter, Thirupulisami Naidu also setup his sons to file a suit for partition, O.S.No. 16 of 1975 in which

Thirupulisami Naidu and the society were made as the defendants and all the properties belonging to Thirupulisami Naidu, except the properties

sold to the plaintiffs, were made the subject matter of partition and interim order was also obtained restraining the Society from bringing to sale the

other properties. Thus, the defendants saw to it that the properties purchased by the plaintiff alone would be sold in execution of the decree

obtained by the Co-operative Society. According to the plaintiffs, their vendors had deliberately and dishonestly manoeuvered to have their

properties sold in court auction. Therefore, the plaintiffs were forced to deposit the sum of Rs.1,02,760. Since Thirupulisami Naidu and his sons

are bound in law to discharge the decree in O.S.No.59 of 1956 and since the plaintiffs were forced to deposit the sum on account of fraudulent

and dishonest acts of Thirupulisami Naidu and his sons, the plaintiffs had to salvage the property they had purchased. In the meantime,

Thirupulisami Naidu had executed four settlement deeds in favour of his daughter-in-law in order to defeat and delay the claim of the plaintiffs.

They are void and inoperative. The defendants are liable to pay Rs.1,00,760 and since the defendants have no other property except the ""A

schedule property, the plaintiffs are entitled to have a charge over the same. The plaintiffs issued a notice to which the defendants gave a reply

containing untenable allegations. Since the defendants are liable to pay the amount, the suit has been filed on behalf of the plaintiff and the creditors.

In the written statement, the defendant denied all the allegations and stated that the suit is bad for misjoinder of parties and cause of action and

that it was time barred and also that since no petition had been filed to sue in a representative capacity, the suit had to be dismissed. It is admitted

that the property belonged to Thirupulisami Naidu, who, according to the defendants squandered the family properties and incurred several debts.

The Society, the plaintiff in O.S.No.59 of 1956 claimed a sum of Rs.42,000 with interest and the suit was decreed. In appeal, the decree was

modified and pending appeal, interim stay was granted on condition that Thirupulisami Naidu executed a security bond for Rs.15,000. In 1963, the

properties purchased by the plaintiffs were attached. The value of the suit property in 1969, according to the Amin was Rs.1,00,000. After the suit

O.S.No.59 of 1956 was decreed Thirupulisami Naidu filed a petition under Sec. 47, C.P.C., which was allowed. In the meantime, Thirupulisami

Naidu, who was indebted heavily decided to sell properties to the plaintiffs, who agreed to take care of the pending legal proceedings and to

discharge the other debts. Thirupulisami Naidu believed that the plaintiffs could relieve him of the worry of litigation and for that reason, agreed to

sell and three sale deeds were executed for income tax purposes. Since at that lime, the arrears due to the society was assesed at Rs.98,600, the

purchasers-agreed to purchase the properties at Rs.55,000 along with the risk. The plaintiff also retained Rs.15,000 out of the sale consideration

towards expenses at litigation on 19.4.1971. The plaintiffs entered into agreement with the vendors regarding the retention of Rs.15,000 towards

litigation expenses, which was agreed to be returned in the event of success in the appeal. On the date of sale, there was no attachment on the

properties. The plaintiffs who knew about the pending litigation expenses took the risk and bought the property for a low price. Even in the suit

notice, the plaintiff have admitted that they knew about the decree in O.S.No.59 of 1956 at the time of sale deed. So, the plaintiff''s vendors had

acted fairly and honestly and the purchasers knew about the proceeding in O.S.No.59 of 1956 and even if they knew only about the security

bound, the very reading of the security bound would show that Thirupulisami Naidu had undertaken to deposit the entire dues in the event of failure

in the appeal. The plaintiffs have at no point said that they have been misguided by false representation and they had purchased it with full

knowledge of the pending proceedings and entered into the sale as a speculative transaction. The plaintiffs had allowed the properties to be sold in

court auction and have burdened the vendors to the tune of Rs. 1 lakh. They should have called upon Thirupulisami Naidu to discharge the decree

debt but unnecessarily they had burdened the Thirupulisami Naidu. The plaintiffs did not call upon Thirupulisami Naidu to discharge the decree

because they were aware of their obligation to discharge the decree. The defendants are not bound to indemnify the plaintiffs. The plaintiffs are not

entitled to any relief.

The second defendant has filed her written statement, which is as follows:

The settlement deeds were executed because the daughters-in-law had been deprived of their jewels to meet the lavish expenditure of

Thirupulisami Naidu. The settlement deeds are true and valid and not made to defeat and delay the claim of the plaintiffs. So the defendants pray

that the suit should be dismissed.

The learned Sub Judge, Tindivanam dismissed the suit. The learned Sub Judge held that the suit as framed is not maintainable since no petition

under O.1, Rule 8 had been filed nor had permission been given. But the learned counsel for the appellant Mr.S.Parthasarathy who produced the

certified copy of the order in I.A.No. 16 of 1981, an application under O.1, Rule 8 to show that the petition had been ordered as prayed for. As

regards the material issues, the learned trial Judge held that the plaintiffs were not persons, who had purchased the properties without notice of the

encumbrance and in fact that is why they could buy it at such a low price and that there was no suppression of any material particulars on the part

of the plaintiffs vendors and even during the execution proceedings, the plaintiff had not conducted, themselves as reasonable persons but had

deliberately stood by while the properties were sold in execution. For these and other reasons, the trial court dismissed the suit.

The learned counsel for the appellant (plaintiff) Mr.Parthasarathy submitted that the trial court had totally missed the main issue which was that

the plaintiffs having paid money which the defendants had to pay were liable to be reimbursed, he submitted that this was a case where the

purchasers had been forced to pay the amount in order to save the property and therefore, the defendants were legally bound indemnity the

plaintiffs for the loss sustained by them.

The learned counsel drew attention to the recitals in the various documents:

Ex.A-3, dated 26.7.1958 which is the Security Bond executed by the vendor of the appellant in compliance with the order of this Hon''ble Court

in C.M.P.No.5022 of 1957 in A.S.No.403 of 1957 arising out of the decree in O.S.No.59 of 1956. It is stated therein that if the appeal ended in

favour of Thirupulisami Naidu, the vendor the bond would get discharged. Otherwise, the bond will be in force until the decree is fully satisfied.

There is also an undertaking in clause 3, wherein the said Thirupulisami Naidu undertakes to deposit the amount for which he is liable if

A.S.No.405 of 1957 fails or any appeal therefrom and that if he failed to so deposit, he would be liable under the said bond upto a limit of

Rs.15,000.

The learned counsel for the appellant therefore submitted that as per the bond, the liability created upon the properties described in. the

schedule thereto was only to an extent of Rs.15,000. In addition there was also the categoric undertaking by the appellants vendors that he would

deposit the entire liability in case the appeal went against him.

9 The learned counsel for the appellant also pointed out to the recitals in the agreement Ex.B-1 and the sale deeds Ex.A-1 and Ex.A-2. In the

agreement between Thirupulisami Naidu and his sons and Dharamchand, the father and husband of the appellants 1 and 2 respectively, it is stated

that apart from the security bound for Rs. 15,000 there are no other encumbrances. The parties 2 to 5 in the agreement who are the sons of

Thirupulisami Naidu were cast with the liability of discharging not only the sum of Rs.15,000, which is the subject of the security bond, but also any

other encumbrances that may come to light.

As regards Rs.15,000, for which the security bond was created, it was agreed by the parties 2 to 5 in Ex.B-1 that this should be retained by

Dharamchand, party no. 1 to prosecute any case arising in respect of security bond and pay the balance remaining after spending for the litigation.

The recitals in Ex.A-1 and Bx.A-2 sale deeds are identical and the covenant in the sale deeds which were pointed out by the learned counsel for

the appellant is that, there was no encumbrance apart from the security bond and if any other encumbrance came to light, it would be cleared at the

expense of the vendors.

Learned counsel for the appellant at this juncture also pointed out that in the sale deed, there were references to various other debts of the

vendor and the appellants had to discharge as per the direction of the Vendors but there was no reference here to the amount recoverable by them

from the purchasers, apart, ofcourse from the reference to the security bond and the amount of Rs.15,000 mentioned therein.

12 The appellants found that this property which they had purchased, to help Thirupulisami Naidu who was beset by debts even as per the

evidence of his son D.W.1, had become the subject matter of sale in the E.P. filed by the Society against Thirupulisami Naidu. The appellants had

to seek adjournment of the execution proceedings by paying various amounts, at every hearing. According to the learned counsel for appellants

they believed that their vendors would come forward to discharge the decree debt. In the meantime, the vendors of the appellants viz.,

Thirupulisami Naidu and his sons filed a suit O.S.No.154 of 1974 for recovery of Rs.16,100, which was the amount retained by the appellants for

litigation expenses. According to Thirupulisami Naidu and his sons this amount had to be repaid by the appellants herein, Thirupulisami Naidu''s

sons also filed a suit for partition O.S.No.16 of 1975, wherein 3/4th share of the suit properties were sought for, which, included all the properties

of Thirupulisami Naidu except the one sold to the appellants herein and interim injunction was obtained by the sons of Thirupulisami Naidu

restraining the Society/decree holder in O.S.No.59 of 1956 from bringing the suit properties to sale. According to the learned counsel for the

appellant, that this was a blatant attempt by the vendors of the appellant to see to it that the properties sold under Ex.A-1 and Ex.A-2 were sold

and the other properties were saved Even in the evidence D.W.1 has stated:

The reference to the Rice Mill is the property sold under Ex.A-1 and Ex.A-2. The appellants therefore filed a petition under Sec 24,CPC

O.P.No.79 of 1975 to transfer the execution proceedings to be tried along with the aforesaid suits. This petition was dismissed by order dated

11.3.1976 (Ex.A-6), wherein the learned Judge has given a finding that the second respondent therein viz; Thirupulisami Naidu. ""wants to protract

the proceeding by creating all complications so that he can gain more time.

The learned counsel for the appellant also drew attention to certain findings in the judgments, in O.S.No.16, of 1975, the partition suit (Ex.A-5)

and in O.S.No.154 of 1974, (Ex.A-4) suit for recovery of money, referred to above. While dismissing O.S.No.16.of 1975 learned Judge has held

(Ex.A-5) as follows:

Thus form the evidence of P.W.1 it is clear that the suit has been filed only to ward off the sale of the property or to prevent the second defendant

from proceeding against the house property and that is the only object that is attempted to be achieved by the plaintiffs in filing the suit. Therefore,

on an analysts, I hold that the decree in O.S.No.59 of l956 is binding upon the plaintiffs and that the plaintiffs cannot question the same.

The other case, O.S.No.154 of 1974 which is the suit filed by Thirupulisami Naidu and his sons for recovery of Rs. 16,100 also resulted in

dismissal. The relevant extract from the judgment in this case, (Ex.A-4) is as follows:

The implied understanding between the plaintiffs and the defendant is to the effect that the plaintiffs would be responsible for discharging the

decree amount and save the property or being sold in the court auction...both morally as well as legally the plaintiffs are bound to indemnify the

defendant atleast to the extent to which the amount so retained under EX.A- 1 ....The assertion and undertaking contained in Ex.B-1 not fulfilled

by the plaintiffs. Atleast the plaintiffs are bound to forgo the security amount viz., Rs. 15,000 and they cannot seek to recover in the light of the

huge loss occasioned to the defendant due to the court auction sale...The recitals in Ex.B-1 when read with Ex.A-1 contract would definitely show

that the plaintiffs are not entitled to recover the suit amount....

The reference to Ex.B-1 is to the security bond. The counsel for the appellant therefore submitted that in all the prior proceedings, the findings are

to the effect that the decree in O.S.No.59 of 1956 had to be discharged by the vendors of the appellant and there was no agreement inter parties

that the appellants would take care of discharging the debt due to the Cooperative Society.

The learned counsel for the appellant pointed out Ex.A-7, Ex.A-8, Ex.A-9, Ex.A-10 and A-12 to show that the appellants had, at every

hearing of the execution proceedings, deposited money towards the decree liability and finally under Ex.A- 14, which is the petition under O.21,

Rule 89, the appellants who had an interest in the suit property deposited the amount unconditionally where upon the sale was set aside. The

learned counsel for the appellant would submit that at the time of Ex.A-1 and Ex.A-2 the vendor Thirupulisami Naidu was harassed on all sides by

debtors and it was the appellants who, of course knowing the risk, came forward with the money to pay off the various debts but there was no

understanding oh the part of appellants to bear the responsibility of satisfying the debt due to the Society. On the other hand, there was a clear and

unambiguous covenant by the appellants'' vendor that any such encumbrance that came to light would be discharged by them. The recitals in the

security bond is also to the same effect. The retention of Rs. 15,000 out of the sale consideration was to apply the same towards the cost of any

litigation that may arise in respect of security bond. The recitals of the security bond also make it clear that the charge created under the bond upon

the suit properties is only to an extent of Rs. 15,000. Therefore, according to the learned counsel for the appellant the expenses incurred by the

appellants to save the property should rightly be reimbursed by the respondents who are the sons and settlers of Thirupulisami Naidu. The

settlement deeds executed by him in favour of his daughters-in-law and daughter were voidable, since they had been brought about only to defeat

and delay his creditors, in particular, the appellants herein.

He referred to the following decisions in support of his contention that when a person who saves his property from being attached, by paying

the amounts due by another he is entitled to recover from the said person who owes the debt, the amount paid by him to save the property. He

referred to the judgment reported in Subramania Iyer v. Rungappa Reddi, ILR 33 Mad. 232, which is a judgment of a Division Bench of our

Hon''ble High Court where reference is made to the words of Sir Fredrick Pollock to Sec. 69 of the Contract Act:

The words ""interested"" in the payment of money which another is bound by law to pay might include the apprehension of any kind of loss or

inconvenience or at any rate of any detriment capable of being assessed in money.

The Division Bench also quoted the observation of Privy Council in Dulichana v. Rama Kishan Singh, ILR 7 Cal. 648:

In this country if the goods of a third person are seized by Sheriff and are about to be sold as the goods of the defendant and the true owner pays

money to protect his goods and prevent the sale, he may bring an action to recover back the money he has so paid. It is the compulsion under

which they are about to be sold that makes the payment involuntary.

The learned counsel for the appellant submitted that this is a case to which the aforesaid decision clearly applies. He referred to Sec. 69 of the

Contract Act. which is as follows:

""Reimbursement of person paying money due by another, in payment of which he is interested- A person who is interested in the payment of

money which another is bound by law to pay, and who therefore pays it, is entitled to be reimbursed by the other.

According to the learned counsel for the appellant, there was no legal liability on the part of the appellants to make the payment but they were

interested in making the payment in order to save their property and they did so on behalf of their vendors who were the persons bound by the

decree debt to make the payment. They had hot deposited the amount gratuitously but to protect their own interest viz., to set aside the sate of the

property that they had purchased from the vendors who were the judgment-debtors. According to the counsel for the appellant, the sequence of

events and the evidence clearly show that the respondents tried by all means to save their other properties and to manoeuver to have the properties

purchased by the appellants be sold in discharge of a decree debt for which the respondents viz., appellants vendors alone were liable. The

respondents after having coming to know that the sale had been set aside by the appellant making the deposit and the two suits having resulted in

dismissal brought about the settlement deeds to ensure that the other properties of Thirupulisami Naidu were placed out of the reach of the

appellants in case the appellant sought reimbursement for the money paid on their behalf. The counsel for the appellant therefore would submit that

the appeal had to be allowed.

On the other hand, the counsel for the respondents Mr.V.Ragavachari submitted that there was no warrant for interference with the judgment

of the trial court. According to him, the appellants were moneylenders, who on their own admission were familiar with court proceedings and they

had purchased the property at a ridiculously low price fully aware of the risk they were exposing themselves to. According to the learned counsel

for the respondents the recitals in the security bond clearly spelt out the fact that there was a litigation pending and as stated by the learned Trial

Judge there was no attachment in force on 14.4.1971, since on that date the order of the attachment had been set aside. Therefore, the question of

the respondents suppressing any defect in the title did not really arise.

The learned counsel for the respondent also stated that the appellant had brought to the purchaser''s notice that an appeal was pending in the

High Court, against, O.S.No.59 of 1956 such being the case any reasonable man would know that there was no guarantee that the appeal would

be in favour of his vendors and therefore, the appellants knowing the inherent risk purchased the property for a very low price. There was no other

reason why the respondents should have sold a property, worth even as per the Amin''s valuation at a much higher price, for Rs.55,000 unless

there was an agreement between the parties that the purchasers would discharge the decree debt in O.S.No.59 of 1956.

The learned counsel for the respondents cited several authorities with regard to the entitlement of compensation if there is any defect in title. He

referred to the decision reported in Margathayammal v. Ruthirasami Naicker, 89 L. W. 405, which is a decision rendered by the Division Bench of

this Hon''ble High Court which arose out of a suit for damages arising out of breach of warranty of title. In this case their Lordships held that there

was nothing to support the case of the plaintiff that there had been any breach of warranty of title and also a breach of covenant can only arise

when the purchasers possession is disturbed. When there was no dispossession there could be no suit for damages. In the instant case since the

appellants were not dispossessed, the learned counsel submitted they could not claim damages.

Next the learnted counsel for the respondents referred to the decision reported in M.Delli Gramani v. Ramachandran, 1951 (2) M.L.J. 611,

which is also a judgment rendered by First Bench of the Hon''ble High Court (P.V.Rajamannar, C.J. and Mr.Justice Venkatarama Iyer) to show

that unless there was fraud no court of equity will entertain claim for compensation. Their Lordships held as follows:

To sum up if there is any error in the statement of the extent of property agreed to be sold the purchaser can claim specific performance with

compensation if he can bring his case under Sec. 14 of the Specific Relief Act but if the contract has been completed by the execution of the sale

deed then the purchaser can claim compensation, if he establishes fraud; or if there is a special agreement for making compensation for errors in

guarantee or if there is a warranty that the extent conveyed by the said deed is correct. Apart from such cases, he has no right to compensation.

In the instant case according to the learned counsel for the respondent there is no whisper of fraud in the pleadings nor proof thereof. Therefore,

there cannot be any claim for compensation.

Next the learned counsel for the respondent relied on Sachidananda Patnaik and Another Vs. G.P. and Co., . That was a case where the

plaintiff prayed for return of earnest money on the ground that the pendency of proceedings under the Orissa Estate Abolition Act, was not

disclosed by the defendants. The Orissa High Court, though decreeing the suit for other reasons, held that when there is no averment in the plaint

that the plaintiff was not aware of the pendency of the proceedings, the is on the plaintiff that there was material defect in the seller''s title which the

seller did not disclose and that the nondisclosure was fraudulent.

The learned counsel for the respondent would, state that from a reading of the various exhibits it was apparent that the appellant was aware of

the pendency of the proceedings pursuant to the decrees in O.S.No.59 of 1956 and therefore, there was no fraud involved and they cannot be

compensated.

Next the learned counsellor the respondent referred to the decision reported in Ramaswami Naicker v. Viswanatha Chetty, 1950 (1) M.L.J.

In that case the plaintiff made the payment into court and claimed reimbursement under Sec. 69. This Hon''ble Court dismissing his claim held

that the plaintiff had undertaken under Ex.D-2 to-pay a sum of Rs.2,014. Therefore, it was not merely a person interested in the payment but a

person bound in law to pay and therefore Sec. 69 would not be applicable to him. Even on ground of justice or equity the learned Judge rejected

the claim of the plaintiff quoting the words of the Judicial Committee in 1875 L.R 2 IA. 131.

It is not in every case in which a man has benefited by the money of the other that an obligation to repay that money arises. The question is not to

be determined by nice consideration of what may be fair or proper according to the highest morality. To support such a suit there must be an

obligation express or implied to repay.

There is no such obligation in the instant case according to the learned counsel for the respondents and therefore, there was no, liability to repay.

Finally, the learned counsel for the respondent relied on the decision reported in Bhagathyammal Vs. Dhanabagyathammal, , where this

Hon''ble Court held that when a person deliberately purchases property with knowledge of defect of vendor''s title there cannot be any claim for

damages for violation of covenant for title. The learned Judge referred to a decision rendered by Mr.Justice Kailasam (as he men was) in

Ramalinga Padayachi v. Natesa, I.L.R .(1967) 1 Mad. 1 holding.

but the rule cannot have any application to a case where the plaintiff as in the present case himself knew fully well that the defendant had no title to

the property.

Following this decision the learned Judge in the decision referred to above held:

in the present case in view of the findings given above it is clear that the plaintiff had not acted on the basis of any representation and he

deliberately purchased the property with a view to speculate on a litigation. In such a case the principle laid down by Kailasam, J. would clearly

apply and the plaintiff would not be entitled to damages.

The learned counsel for the respondents would therefore submit that the appellants knew about the pending litigation and that there was a

decree obtained by the Society in O.S.No.59 of 1956 and that the appeal would either go in favour of or against the vendors and yet purchased

the property. He purchased it speculatively and for a very low price only because of the pendency of proceedings. The appellants, it was pointed

out, were not men without the knowledge of court proceedings, on the other hand they were professional money lenders to whom such sales were

common in the course of their business. The learned counsel for the respondent pointed out that P.W.1 in his evidence after saying that there was

no agreement before the sale deed, and when confronted with Ex.B- 1 agreement, to conceded that there was an agreement. The counsel for the

respondents also submitted that adverse inference should be drawn from non-examination of the plaintiff''s father who was party to the agreement.

The learned counsel for the respondent would therefore submit that such persons were not entitled to any reimbursement. According to him ail

the cards were placed fair and square on the table by the respondents while selling the property, there was no suppression, no concealment and no

fraud. The deposit made by the appellants in the execution proceedings was only as per the understanding between the parties, whereunder the

appellants had impliedly taken up the responsibility to discharge the debt due under O.S.No.59 of 1956.

The learned counsel for the respondents finally said that the settlement deeds were bona fide transactions and cannot be avoided at the

instances of the appellants. So, there was no warrant for interference with the judgment of the trial court.

The question that arises in this appeal is whether the appellant is entitled to reimbursement of the amount paid by him to set aside the sale.

At first glance it appeared that to find out what would be equitable in this case would be a task fraught with difficulties. On one hand, there is a

purchaser, who is no doubt a professional money lender who has purchased the property from a person who is deeply in debt for what may be

low price with a knowledge that there is a charge on the property sold to the extent of Rs.15,000 under a security bond. On the other hand, there

are the Vendors who admittedly sold the property when they were pressurised on all sides by creditors, who could not have easily found a willing

buyer in such circumstances, and who having sold the property, have done their best to see that those properties alone, out of other properties

belonging to the family, are sold to settle what is due by them to the decree holder Society.

To help to crystalise the facts, an arrangement of the various events chronologically proved helpful.

1 26.7.1958 date of security bond as per the directions of this Hon''ble Court in A.S.No. 403 of 1957.

2 14.12.1962 decree in A.S.No. 403 of 1957

3 29.10.1963 properties attached

4 25.9.1967 the attachment is set aside in E.A.No.598 of 1967

5 14.4.1971 the date of sale deed of Ex.A-T and Ex.A-2

6 9.4.1974 E.P. revived - filing of O.S. No.54 of 1974 for recovery of amounts due as per the

agreement between the parties.

7 9.1.1975 filing of O.S.No.16 of 1975 suit for partition together with I.A:No.97 of 1975 for injunction

restraining the sale of properties in execution of decree in O.S.No.59 of 1956.

8 30.1.1975 deposit of money by the other dates plaintiffs in execution proceedings.

9 31.1.1977 O.S.No. 16 of 1975 dismissed.

10 2.1.1978 court auction sale 2.1.1978

11 19.1.1978 Ex A- 17, Ex.A-1 8, Ex.A-1 9 settlement deeds.

12 30.1.1978 Lodgment schedule

13 13.2.1978 Sale set aside.

14 28.4.1978 O.S.No.154 of 1974 dismissed.

15 13.12.1978 A.S.No.377 of 1977 against O.S.No.16 of 1975 dismissed as withdrawn.

16 4.6.1979 Ex.A.22-reply notice by the respondents,

17 10.1.1985 A.S.No.272 of 1979 pending in the High Court against O.S.No.154 of 1974 appeal

withdrawn subject to any defence raised in O.S.No. 1 of 1980 which is the present suit.

A clear pattern emerge from a reading of these dates and events, Thirupulisami Naidu the vendor of the plaintiffs and the father-in-law of

respondents 1 to 3 and father of respondents 4 to 7 was evidently a man who got himself deeply in debt. He owned several properties including

the suit properties and his creditors began to pressurise him for repayment. It is the evidence of D.W.1, the son of the said Thirupulisami Naidu.

In fact these debts are shown in the recitals to the sale deed which admittedly had been discharged by the appellants/purchasers as directed by

their vendors. The security bond which had been executed in respect of a decree obtained by a co-operative society created a charge over the suit

property to the extent of Rs.15,000. The recitals of the sale deed show that the vendors alone would be responsible for any other encumbrance.

The recitals in the security bound is also to the same effect. It may be that the properties were sold for a low price as contended by the counsel for

the respondents but it must be remembered that it was sold at a time when the vendor was harassed on all sides and the purchaser came forward

to clear many of the outstanding debts of the vendor. The sale consideration was evidently the one which was agreed to by the parties. In fact it is

the admission of the D.W.1.

When the Thirupulisami Naidu and his sons (respondents 5 to 7 herein) had taken the precaution of listing the various debts which have to be

discharged by the appellants on their behalf they would have also made sure to list the decree debt in O.S.No.59 of 1956, as rightly pointed out by

the counsel for the appellant, if there was an agreement between the parties that the purchasers should discharge the liability due to the Society.

Though in the evidence in chief D.W.1 would state that,

In the cross examination he would state that he had no direct knowledge about what transpired between the plaintiffs and his father and also

admitted that the decree obtained by the co-operative society was not mentioned in the sale deed. In fact even in the written statement it is only

stated that Dharamchand agreed to look after all legal proceedings and also assured a substantial amount to discharge the other debts. In the reply

notice given by the respondent counsel which is marked as Ex.A-22 it is not stated that the plaintiffs had agreed to discharge the debt due to co-

operative society and were bound to do the same. On the other hand, the plaintiffs are referred to as ""mere volunteers"" who had paid amounts to

set aside the sale. The 1st appellant as P.W.1 has stated in his evidence that he deposited the amount to save the property purchased by him. The

agreement Ex.B-1 does not show any understanding between the parties that the decree debt would be discharged by the purchasers. On the

other hand, even as per the agreement apart from Rs. 15,000 which is the subject matter of the security bond and the other specified debts all

other encumbrances were to be discharged by the vendors. The parallel proceedings also have a bearing on this case. When the Society took out

execution proceedings to bring all the properties to sale, the vendors of the appellant have resorted to various tactics to secure all the properties

save the one purchased by the plaintiffs from being sold in execution. A partition suit is filed by the respondents 5 to 7 against their father and the

Society, wherein interim injunction is obtained restraining the society from bringing to sell the suit properties. The property which is sold to the

plaintiff is not included in the suit schedule. That this is a collusive suit is established beyond doubt by evidence of D.W. 1.

It is ironic that the witness should say that it would not be fair to include the rice mill in the partition suit since it was sold to the plaintiffs when the

respondents obviously does not find anything unfair in allowing that property to be sold to discharge their liability.

D.W.1 also stated in his evidence that it is true that they filed the partition suit only with the intention of bringing the rice mill for sale in court

auction. Therefore, O.S.No.16 of 1975 is admittedly a collusive suit filed to protect the other properties from being brought to sale by the decree

holder and to ensure that the properties purchased by the appellants are exposed to execution. The interim injunction obtained pending the partition

suit and pending the appeal therefrom, was evidently kept alive to serve certain purpose that is, to bring the rice mill property viz., the properties

for sale in court auction.

The finding of the learned judge in O.S.No. 16 of 1975 that the decree in O.S.No.59 of 1956 is binding upon the vendors of the appellants

herein has become final. It is definitely a relevant factor, as also the finding of the learned judge in O.S.No. 154 of 1974 that it is only Thirupulisami

Naidu and his sons who were responsible for discharging the decree amount and save the properties from being sold in court auction.

After considering the facts and circumstances of the case the learned Judge in O.S.No. 154 of 1974 came to the conclusion that the appellant

herein had parted with huge sum for no fault of his and morally as well as legally the plaintiffs in that case who are Thirupulisami Naidu and his sons

are bound to indemnify the purchaser. The appeal filed against the dismissal of this suit was also withdrawn. The learned counsel for the appellant

would point out that the findings of the learned Judge in the above case will definitely have a bearing on the instant case since what was withdrawn

was only the appeal and the findings of the suit remain unchallenged and they are between the same parties and also relating to the suit transaction.

To this, the learned counsel for the respondent would state that the appeal was withdrawn subject to any defence being raised in the present

suit and therefore, the findings there can still be challenged. The relevant passages from the judgment which is marked as Ex.A-4 has already been

extracted in an earlier paragraph.

In the written statement filed herein, there is no categoric averment that the plaintiffs undertook to discharge the decree debt on behalf of their

vendors. On the other hand all that they say is there was an assurance on the part of the plaintiffs that

they will look after all the legal proceedings and also assured a substantial amount to discharge the other debts"".

An extract from para. 18 of the written statement is as follows:

Hence, the plaintiff who knew about the pending litigation pendency of the appeal and its consequences took the risk and knocked the property

for a lowest price of Rs.55.000 and at para 20.

the very reading of the security bond would show the said Thirupulisami Naidu had undertaken to deposit the entire amount due under the decree

in case of himself loosing the appeal.

Therefore, this is in conformity with the findings referred to above in Ex.A-4. From the oral evidence extracted above and the relevant extracts

from the various exhibits as also the pleadings, it is seen that the appellants vendor had assured them that they would discharge the decree debt

owed by them to the Society in O.S.No.59 of 1956. This is an amount which the defendants were bound in law to pay and had, to quote the

words of the Judicial Committee referred to earlier, ""an obligation... to repay)

Reference may be made to the decision reported in Menikavur Bal v. Ranganatham Pillai, AIR 1946 Mad. 244 (Leach, C.J.) decided by a

Division Bench of this Hon''ble Court was a case where the purchaser prayed for reimbursement holding the vendors liable under Sec. 55(1)(g)

Transfer of Property Act and Sec. 69, Contract Act. The trial court partly decreed the suit on the ground that reimbursement would be on to the

value of the vendors share in the equity of redemption. C.J. Leach, speaking for the Division Bench held as follows:

The vendors had convenanted that the property was free from attachment and they undertook to pay whatever the vendee was required in law to

pay to remove an attachment should one be found to exist. There was a lawful attachment and in respect of the sum of Rs.5,375 and this the

plaintiff paid in order to free his title.

The present case is similar. All the three elements that are required to satisfy Sec. 69 are present in this case. There should be (1) a person

interested in the payment of money, (2) the payment should be one which another is bound by law to pay, and (3) the person interested in the

payment should actually pay it. If all these three elements are there then the person making the payment shall be reimbursed by the person by

whom money is due. Thirupulisami Naidu and his sons are the vendors in Ex.A-1 and Ex.A-2. Thirupulisami Naidu had subsequently settled all his

other properties on his daughters-in-law and daughter, who along with his sons are the respondent herein. Therefore, they in their individual

capacity and as heirs or settles in interest of Thirupulisami Naidu are liable to satisfy the decree debt owed by him. The vendors of the appellants

are ""the persons who owe a legal duty to pay the amount to the Society. They are now bound to reimburse the amounts paid by the appellants to

discharge the debt, as they were compelled to set aside the court auction sale of the properties purchased by them. The payment was not made as

mere volunteers as alleged in the reply notice issued by the counsel for the respondents. Another passage in Ex.A-4 which is relevant is as follows:

No reasonable explanation is forthcoming from the plaintiffs as to the undertaking given in Ex.B-1 viz., security bond) to discharge the

encumbrances. Therefore, all this would go to show that the appellant is definitely entitted to be reimbursed for the amount paid by him to save the

property from being sold.

It is evident that the four settlement deeds were brought about only so that the properties are put out of reach of the creditors with intend to defeat

and delay their rights. There is no evidence to substantiate the recitals contained in the settlement deed as to the necessity for creating the

settlement deed on those particular debts. The sequence of events as pointed out by the learned counsel for the appellant clearly demonstrates that

the settlor is conscious of the fact that the appellants would look to his other properties for reimbursement of the amount deposited by them and

had brought about the settlement deeds to save those properties from the reach of the creditors. The decisions referred to by the learned counsel

for the respondent to the effect that unless fraud was established, there can be no successful claim for damages and are not relevant since in the

instant case the appellants have based their claim on Sec. 69 of Contract Act.

The case relied on by the learned counsel for the appellant reported in Subramania Iyer v. Sungappa Reddi, ILR 33 Mad. 232, clearly

applicable to this case. This decree debt was a debt payable in law by the respondents and nothing has been shown to prove that this payment was

something the appellant was bound to pay The appellant had clearly established the loss and detriment that would have been suffered by them had

they not made the payment, since they would have lost the property purchased by them under Ex.A-1 and Ex.A-2. However, the appellants have

not explained why they did not deposit the entire amount before the court auction sale. The averment in the written statement that the appellants

have deliberately burdened their vendor with poundage, and profit is a justifiable grievance. Therefore, the appellants are entitled to recover the

amount deposited by them in court less poundage and profit, together with interest as prayed for.

For the aforesaid reasons judgment of the trial court is set aside and the appeal is allowed to the aforesaid extent. No costs.