Veerni Soorayya vs Kateeza Bee gum (died) and Others

Viswanatha Sastri, J.—Latchayya, the father of Defendants 1 to 6, purchased under a sale deed, Exhibit P-1, dated 12th April, 1927, from the Plaintiff and the deceased wife of the 7th Defendant, eleven godowns to the main bazaar, Rajahmundry, 232 acres of land in Kavalagoyyi village and a charge decree in O. S. No. 13 of 1923 on the file of the District Court, East Godavari, for a sum of Rs. 40,000. A Sum of Rs. 3,000 in cash and conveyance of land worth Rs. 2,000 by the vendee to the vendors formed part of the consideration for Exhibit P-1, the remaining Rs. 35,000 being left with the vendee for discharging a mortgage subsisting on the properties sold under Exhibit P-1 and other valuable properties of the vendOrs. The vendee took leases from the tenants of the godowns and collected rents from some of them And also executed the charge decree in O. S. No. 13 of 1923 and realised considerable amounts. The vendee sued for possession of the god owns and the lands sold under Exhibit P-1 and the final result of that litigation in the High Court was that the Plaintiff was held entitled to only 7/64 share and the seventh Defendant''s wife to 8/64 shares in the properties sold by them to Latchayya.

The vendee and his sons defaulted to pay the mortgagee with the result that there was a decree on the mortgage and a Court sale of the hypothec including the properties of the vendors not sold under Exhibit P-1. The Plaintiff thereupon sued in forma pauperis for the recovery of Rs. 20,000 from Defendants 1 to 6, the sons of deceased Latchayya, as "damages and compensation." The co-vendor of the Plaintiff having died, her heir and husband was made the 7th Defendant to the suit though the sum of Rs. 20,000 was claimed by the Plaintiff for herself alone.

Pending the suit the first Defendant died and two of his sons were imp leaded as Defendants 8 and 9 but not his wife and .another minor son. During the trial the Plaintiff did not press the claim against Defendants 8 and 9. The trial Court held that the vendors would be entitled to recover the amount left by them with the vendee to discharge the mortgage but not paid by the vendee, unpaid purchase money or as damages for breach of the vendee''s undertaking to discharge the mortgage. The suit, was, however, dismissed on two grounds (i) that one of the two vendors could not maintain the suit and (ii) that the defect in the title of the vendors was a bar to the maintainability of the suit. The Plaintiff preferred an appeal confining tier claim to Rs. 3800, and the appeal was allowed and the suit decreed to that extent by Subba Rao J. (as he then was). Defendants 2 to 6 have preferred this appeal under CI. 15 of the Letters Patent.

It was argued by Sri Poornaiah for the Appellant that the suit obligations and ar was one for damages for''. breach of a cpntract of indemnity and that the Plaintiff having herself failed to convey a good (Oct.) 1957 Andh. Pra. D.F./44 the and being guilty of a breach of the covenant for title, could not sue for damages. Though the plaint is not happily framed, it is possible to regard the Plaintiff''s claim a one for unpaid purchase money as well as one for damages for breach of indemnity and it has been understood by the learned Judge as one for unpaid purchase money. The question is whether it is open to the Defendants to non suit the Plaintiff on the ground of a breach by the vendors of the covenant for title and quiet enjoyment.

u/s 55(1)(a) of the Transfer of Property Act the seller is bound to disclose to the buyer any material defect in the seller''s title to the property. Under the last. para, of Section 55 an omission to make such disclosure is "fraudulent". Therefore, it is open to the buyer to avoid the contract of sale on this ground, if the matter rests in the stage of contract. He could also set aside the sale even if the contract has been completed by the execution of a conveyance, if he makes out a case of fraud by establishing that his seller had no title at all to the property sold and this fact which was known to the seller but cculd not be known by the buyer, was deliberately suppressed by the seller.

A sale is an executed contract and effects transfer of property and the considerations which apply to the enforcement of mere contracts do not necessarily apply to a transfer already effected. So long as the buyer does not get a rescission of the sale deed, the rights and liabilities of the parties w.ould be governed by Section 55 of the Transfer of Property Act. A breach of covenant for title or quiet enjoyment would not � entitle the buyer to avoid the sale on that ground but would entitle him to damages.

If the purchase money or a portion thereof is not paid, the remedy of the seller is not to avoid the sale but to sue for its recovery and enforce his charge. Section 55 confers certain rights and imposes certain obligations on the buyer and seller and these rights and obligations are statutory. u/s 55(5)(b) the obligation to pay the purchase money to the seller is to be performed by the buyer when the seller performs his obligation u/s 55 (1) (b) to execute a proper conveyance of the property.

Under the proviso to Section 55(5)(b) the amount of any incumbrance existing at the date of the sale may be retained by the buyer and paid to the person entitled thereto. In the present case the sum of Rs. 35,000 was left with the buyer to pay off a mortgagee but no time was fixed for making the payment. Therefore, the engagement had to be performed within a reasonable time u/s 46 of the Contract Act. The payment not having been made at all by the buyer, the mortgagee sold other property of the seller which was subject to the mortgage and realised the bulk of the amount due to him.

The amount retained by the buyer for payment to an incumbrancer, it must be paid to the seller. The buyer acts as the agent of the seller as regards the disposal of the sum retained. Avvari Subba Row and Others Vs. Kondamudi Varadaiah (deceased) and Others, at p. 484 (A). The buyer not having paid any portion of the sum of Rs. 35,000 retained by the sellers with him for payment to the mortgagee, is accountable to the sellers for the amount. The suit however, was only restricted to a portion of this sum.

The fact that the covenant for title or quiet enjoyment has been broken by the Plaintiff by reason of her having been found to have had title only to a fractional share of the property con Sieved, would give the buyer a right to damages '' against her. This, however, will not be a bar to ; a suit by the seller for recovery of the unpaid purchase-money, .particularly when she is found the have conveyed a valid title to the buyer to a "A shaxp of, the property .and the buyer retains that in the The seller has a statutory right to recover the purchase money on a charge of the property sold u/s 55 (4) (b) and the buyer is under a statutory obligation to pay it u/s 55 (5)(b) of the Transfer of Property Act. In the absence of a contract to the contrary, the obligation of the buyer to pay the purchase price to the seller arises at the moment the'' sale transaction is completed. A subsequent claim .for damages that might accrue to the buyer oh. the ground of a breach of the covenant for title and quiet enjoyment is no bar to the seller s right to sue for the unpaid purchase money.

There is authority for the view that the rights and: obligations of seller and buyer confer-";red or imposed by S. 55 of the Transfer of Pro-s perty Act are concurrent rights and obligations and are separately enforceable. For instance in a suit by the buyer for possession of the property ''�- it has been held that, the Court cannot make the decree conditional on his paying the unpaid purchase money, the seller''s charge not being a possessory one u/s 55(4)(b). Krishnamma v. Mali, ILR 43 Mad 712 : AIR 1920 Mad 164 Poomalai Padayachi Vs. Annamalai Padayachi and Others, (C), R.T. Ramayya Servai Vs. R. Sama Ayyar and Others, .

It is not open to the Court to introduce and enforce equities modifying the provisions of Section 55 . of the Transfer of Property Act. Velayutha v. Govindaswami, ILR 34 Mad 543 We are aware that a different view has been taken in Allahabad on this point but we prefer to follow the Madras decisions in accordance with the practice of this Court. There is no provision in Section 55 making the obligation of the buyer to pay the purchase money to the seller u/s 55(5)(b) conditional upon the fulfilment of the contract provided for in Section 55(2), a contract which might be broken many years after the sale.

A suit for recovery of the purchase money might well become barred when a breach of the covenant for title and quiet enjoyment occurs and could not be postponed till then. We are, therefore of the opinion that a breach of the covenant for title or quiet enjoyment, is no bar to a suit for recovery of unpaid purchase money. There is no plea of any set-off by the buyer of the loss caused by the breach of the covenant for title and quiet enjoyment even assuming that it can be-pleaded in this suit.

The further contention of the Appellants is that the suit had been filed by the Plaintiff ''claiming her share of the purchase money and not of the whole of it and without making her co-vendor or her heir a Plaintiff. u/s 45 of the Contract Act it is not open to one of two or more joint promisees to sue alone either for performance of the promise in its entirety or to the extent of his share. Sri Raja Sobhanadri Appa Rao Bahadur Vs. Sri Raja Parthasarathi Appa Rao Savai Aswa Rao Bahadur and Others, ; Siluvaimuthu Mudaliar Vs. Muhammad Sahul and Others, , Rameshwar Bux Singh and Others Vs. Ganga Bux Singh and Others, , Satindranath feJatindranath, 31 Cal WN 374 : AIR 1927 Cal wever of Joint promise declines to join M Plaintiff or colludes with the Defendant he can not then be defective. In the present case the heir of the deceased co-vendor of the Plaintiff was made the 7th Defendant to the suit and theatsuit was therefore, maintainable! There is no raft son why the Plaintiff should be denied a decree for an amount which is less than her share of the purchase money. See Nabendra Nath Basak Vs. Shasabindoo Nath Basak and Others, at p. 597 (J).

Lastly it was argued that Defendants 8 and 9 having been imp leaded as legal represent airtimes of the deceased first Defendant and having'' been exonerated from liability, the other Defendants who are the sons of the original buyer Latchayya cannot be made liable for the Plaintiffs-claim. It is true that Section 43 of the Contract Act speaks of two or more persons making a joint promise, in which case, any one of the joint promisors may be compelled to perform the whole of the promise. The section does not apply where parties become jointly liable as heirs by operation1 of law on a contract made by a single person.

In Shaikh Sahad v. Krishna Mohan, 24 Cal LJ 371 : AIR 1917 Cal 829 cited for the Appellant it was held that S. 43 had no application to the case of several heirs of the original tenant and that they must all be joined as Defendants to a suit for rent. It might be observed that, there is some difference of opinion in the Calcutta Highi Court itself on this point and were it necessary to-do so, we would have to examine the case law'' at some length. Here the objection is taken that the wife and minor son of the deceased first Defendant were not impleaded as his legal representatives and the claim against Defendants 8 and 9, who were impleaded asi such legal representatives, was given up.

This point was not raised before the learned3 Judge and is not even hinted at in the grounds of appeal. Moreover when the facts are closely examined the contention is found to be devoid of substance. Latchayya the father and his sons Defendants 1 to 6 were members of a joint family, On Latchayya''s death the first Defendant became the manager and on his death second Defendant. The transaction of sale was one which was entered into on behalf of the joint family and the liability to pay the purchase price is that of the joint family and it is that liability that is sought to be enforced in this suit.

The second Defendant as the managing members, sufficiently represents the family and neither the non-joiner of the widow and minor son of the deceased first Defendant nor the giving up of the Plaintiff''s claim against Defendants'' 8 and 9 would affect the liability of the joint family represented by the second Defendant. It is well settled that the joint family would be bound by a decree properly passed against the manager of the family either in respect of a family property or a family debt. Sheo Shankar v. Juddo Kunwar, ILR 36 All 383 : AIR 1914 PC 136, AIR 1927 56 (Privy Council) , Vadlamanati Venkatanarayana Rao Vs. Gottumukkule Venkata Somaraju, , Muthiah Chettiar Vs. N.M. Rayalu Ayyar, Nagaswami Ayyar and Co. and Others, Radha Krishna v. Satynarayana, ILR (1949) Mad 229 : AIR 1949 Mad 173

For these reasons we are of the opinion that the appeal fails and should be dismissed with costs.