Patna High Court
Nathuni Sah And Ors. vs Satyanarain Prasad And Ors. on 25 August, 1960
Equivalent citations: AIR1961PAT11, AIR 1961 PATNA 11
JUDGMENT Raj Kishore Prasad, J.
1. This appeal, by the defendants first party, is from a judgment of affirmance, of the then Addl. Subordinate Judge. Motihari, who affirmed the decree of the first Court, against the appellants, for a refund of a part of the consideration of the sale to the plaintiffs.
2. The parties to this appeal were vendor and vendee of certain immovable property. On the 14th September 1953, defendants first party, the appellants, executed a sale deed, in respect of plots 36 and 37, for a sum of Rs. 6,000 in favour of the plaintiffs respondents. The plaintiffs came in possession of the entire plot 37, but they could not get possession over the entire plot 36. They got possession only over one katha, out of 4 bighas 12 dhurs, but they could not get possession over 3 kathas 12 dhurs, the remaining area of plot 36, due to want of title in it of the appellants.
3. The plaintiffs, therefore, brought the present suit for a refund of a part of the consideration money of the sale deed.
4. Both the Courts below concurrently held that defendants first party had no title to 3 kathas 12 dhurs of land, out of plot 36, and, that, as under the sale-deed itself, the defendants first party under-took the liability of compensating the plaintiffs, in case of any defect in their title, they were bound to compensate the plaintiffs for want of their title, and, accordingly, a decree for a refund of a part of the consideration, to the extent of Rs. 1,300, was passed in favour of the plaintiffs against the defendants first party.
5. The principal question, raised in the appeal, by Mr. Gupteshwar Prasad, appearing for the appellants, was that the suit of the plaintiffs was not maintainable, because they could not, in law, claim a refund of the consideration money, either in whole or in part, unless the entire sale was set aside. In support of his contention, he relied on a Bench decision of the Sind Chief Court in Allahdino Bacha v. Udhoomal Amardinomal, 202 Ind Cas 584: AIR 1942 Sind 81.
6. The question, therefore, which falls to be considered, is a short and simple one. It arises under Section 55(1)(f) of the Transfer of Property Act, hereinafter referred to as the Act', and, the bearing thereon of the terms of the contract of sale in question.
7. Clause (f), of Sub-section (1), and, Sub-section (2), of Section 55, of the Act, which only are relevant here, omitting the unnecessary portions, are in these terms:
"55. In the absence of a contract to the contrary, the buyer and the seller of immovable property respectively are subject to the liabilities, and have the rights, mentioned in the rules next following, or such of them as are applicable to the property sold:
(1) The seller is bound * * *
(f) to give, on being so required, the buyer or such person as he directs, such possession of the property as its nature admits;
* * * (2) The seller shall be deemed to contract with the buyer that the interest which the seller professes to transfer to the buyer subsists and that he has power to transfer the same:
* * * Section 55 is expressed in terms of a very absolute and clear character. It provides, the irrelevant parts of the section being omitted, that, in the absence of "a contract to the contrary", the buyer and the seller of immovable property are subject to liabilities and have rights, in the remuneration of the elementary proposition, that the seller is bound to give the buyer such possession of the property as its nature admi's.
8. We are concerned, here, with the seller's liabilities and the buyer's rights after completion of a contract of sale. The liability of the seller to give possession --Section 55(l)(f) --and to guarantee title -- Section 55(2) --, are contractual liabilities implied in the conveyance.
9. In every contract of sale, unless the contrary appears, the vendor must be deemed to impliedly agree to give possession of the property to the purchaser, in addition to executing a conveyance in his favour. It is the duty of the seller to give possession, and not to leave the buyer to get possession for himself, notwithstanding even a condition in the sale deed that, if no possession is given, the vendee may take steps to take possession. Sub-section (1), Clause (f), of Section 55, however, does not say when the seller should give possession, but, Section 55(4)(a) shows that possession should be given when ownership passes to the buyer, and this would be at the time of execution of the sale deed, unless it was the intention of the parties that the transfer of ownership should be deferred till payment of price. If that is not the intention, the seller cannot refuse possession, because the price has not been paid.
10. The covenant for title implied by Section 55(2) gives the buyer, no doubt, a remedy in case of defects discovered after conveyance, but, where a suit for the return of the purchase money is based on an express covenant contained in the conveyance itself, it is only an additional safeguard, over and above the statutory obligation under Section 55(2), but, in no case, it either narrows or wipes out the obligation under the statute. Express covenants, no doubt, override and do away with the effect of all implied covenants, and, an express covenant is a special stipulation, which alone governs the rights of the parties, yet the implied covenant cannot be got rid of except by clear and unambiguous expressions, and, as such, the express covenant is over and above that implied by Section 55(2).
11. In the instant case, the suit was based not on a breach of implied covenant of title, but on the breach of the express covenant contained in the deed itself.
12. The conveyance in question is in Hindi. It contains, inter alia, a stipulation, which, when translated into English, would be to the following effect:
"The property sold is free from all kinds of encumbrances, and, legal or other defects, and, if in the future, any encumbrance, on any legal defect, etc., in found, then the executants shall be liable for the same."
13. It is clear, therefore, that there is an absolute declaration by the vendor that the property he is selling is free from all kinds of legal or other defects. There is no contract to the contrary exonerating the vendor from his statutory obligation, imposed upon him by Section 55(2), to give to his vendee a title in the vended property free from all defects of title; on the contrary, there is an express contract in the sale deed itself, fixing a contractual liability on the vendor, undertaken by himself, to compensate the vendee for a defect in his title, if any, when found out in the future, to cover contingencies which were not yet wholly foreseen.
14. It is, therefore, plain that, here the parties contracted that, if per chance, due to any defect in the title of the vendors, the vendees were not able to get possession of the vended property or any portion of the property sold, then, in such a case, the vendors would compensate the vendees,
15. In the instant case, therefore, the plaintiffs' suit, being based on the terms of the sale deed itself, according to which they were certainly entitled to be compensated for the defect in title of the defendants first party, was certainly maintainable in law.
16. The decision of the Sind Chief Court AIR 1942 Sind 81, relied upon by the appellants has no application to the facts of the present case, because, in that case, there was no express covenant or any stipulation at all like here, and, the question, which arises in the present case, did not arise in that case at all.
17. In the Sind case, the appellant there purchased from one Udhoomal, the respondent of that case, land in four Dehs. The sale deed recited that possession was given to the purchaser, but, at the end of the sale deed there was a note signed by Udhoomal, in the following words:
"It has been shown above that I have delivered possession together with the paddy cultivation but it is not so. The paddy and bajhri cultivation of this year belongs to me -- the executant, and the purchaser has no interest in it."
18. The plaintiff vendee, in that case, thereafter, brought a suit for return of the whole consideration paid by him under the sale deed on the allegation that he got possession over the area sold in one Deh only, but had not received possession of any land sold in the other three Dehs. He also asserted that the title of the defendant vendor was partly defective as regards the land in two Dehs and wholly defective as regards the land in the third Deh. Weston, J., who delivered the judgment of the Chief Court, and, with whom Davis, C. J., agreed, observed:
"The conveyance to plaintiff admittedly was not a nullity which plaintiff could ignore. Defendant had title to at least part of the properly. On his allegation the only case which plaintiff could advance was that the sale deed was voidable because of material defect in his vendor's title not disclosed by the vendor, such non-disclosure amounting to fraud under Section 55, T. P- Act. Plaintiff's remedy in these circumstances was a suit for rescission of the sale deed, and for the return of the price paid under Section 38, Specific Relief Act. It was not open to him to ask for return of the price before the conveyance was rescinded." It was further held, in that case, that rescission can be allowed not only of a contract of sale but also of a completed conveyance.
19. In that case, as will appear from the judgment of Weston, J., the plaintiff-vendee's allegation regarding defect of defendant vendor's title complained of, in the three Dehs, was found to be untrue, and the assertion of the defendant vendor that possession of all the lands sold had been given by him to the plaintiff vendee was accepted.
20. The finding of the Court of Appeal below, in that case, that the sale deed was not void ab initio, as the purchaser purchased the property with eyes open, as the title conveyed was valid and saleable, and as possession of all the property sold had been given, subject only to the right of the vendor to remove the then standing crop, was affirmed by the Chief Court.
21. In those circumstances, the above observation was made by Weston, J., and, it was held that the relief sought by the suit, and, asked to be granted in the appeal, was not one which could be granted in the suit, and, as such, it had rightly been dismissed.
22. From the above detailed examination of the facts of the case before the Sind Court, it is plain that that case is clearly distinguishable and has no application here.
23. The provisions of Section 55(1) enable the buyer before completion to ascertain if the title offered is free from reasonable doubt. Once he has accepted the conveyance, and the sale is completed, in the absence of a contract to the contrary, he has no remedy on the contract except for fraud. Omission to make disclosure under Section 55(1)(a) is fraud, and, therefore, if the sale is vitiated by fraud, the buyer can sue to set aside the sale and to recover the price. Remedies after completion are much more limited than those before completion, because most contractual rights merge in the conveyance. Thus, for instance, in the absence of an express covenant, no suit will He after completion for damages for an error of description, unless it is fraudulent, although compensation could have been claimed before conveyance. After completion, remedies are (1) Rescission or (2) Rectification. Rescission, for example, may be on the ground of either (a) fraud, or, (b) common mistake, or (c) incapacity, legal or equitable, or (d) coercion or undue influence.
24. But, where as here, there is an express contract in the conveyance itself that, in case of defect of title, the vendee will be compensated by the vendor, it cannot be said that the vendee is not entitled even then, on the basis of the covenant in the deed itself, to maintain a suit for compensation by way of a refund of a part consideration of the sale for not having got possession over a portion of the vended land due to want of title of the vendor in it.
25. In my opinion, therefore, in the instant case, in view of the express covenant contained in the contract of sale itself over and above Section 55(1) (f) and Section 55(2), of the Act, the plaintiffs' suit, being based on contractual liability, on the breach of the express covenant, referred to before, it is manifest that the plaintiffs' suit for refund of a portion of the consideration money, on the ground of not having got possession over a. portion of the suit land for want of title of the defendants first party in it, was maintainable, and, as such, the plaintiffs' suit has rightly been decreed. I would, therefore, overrule the contention of the appellants.
26. It was, then, argued that, here, the statutory obligation of the seller, under Sub-section (2) of Section 55, to give to his purchaser a title free from reasonable doubt, was negatived, in the particular circumstances of this case, by reason of the terms of the contract of sale, reproduced earlier, that if any defect in the title of the vendors appears in the future the vendor shall be responsible for the same, which amounted to "a contract to the contrary", within the meaning of Section 55 of the Act. It was contended that the right given to the vendee by the statute under Section 55(1) (f) was, therefore, excluded, in the present case, by necessary implication, by the terms of contract of sale itself.
27. There can be, no doubt, that, unless it can be shown that there was a clear contract to the contrary between the parties, the vendor had a statutory duty to put the vendee in possession of the vended property as its nature admitted.
28. the question, therefore, boils down to this: Is there any "contract to the contrary" of the terms of the statute? There is none.
29. The words "in the absence of a contract to the contrary", in the beginning of Section 55 of the Act, no doubt, show that the operation of this section can be excluded by any contract or agreement or covenant between the vendor and the vendee, but, in order to evade the operation of this section, the contract must be contrary to, that is, inconsistent with, its provisions, and must be indicated by clear and unambiguous expressions. It is incumbent upon the vendor to express himself with reasonable clearness. ''The contract to the contrary" need not be express and may be implied from the terms of the sale deed, but, in order to exclude the operation of the statutory liability of the vendor, imposed by this section, the contract, covenant or agreement, Or, stipulation, must so clearly be inconsistent with the rules of this section as to lead to the inference that it had been made to qualify the generality of its provisions.
30. The decision of the Allahabad High Court in Nand Ram v. Purshotam Das, AIR 1933 AD 203, was relied upon by the appellants, for the purpose of showing what was the scope of the words "a contract to the contrary", occurring in the initial portion of. Section 55 of the Act.
31. In that case, in the sale deed, the covenant was:
"If. God forbid, any person comes forward (sic as?) a partner or co-sharer and brings a claim, or if any encumbrance, etc., is found....and the property passes out of the possession of the vendees we, the vendors shall ..... pay to the vendees.. the consideration of this sale deed with costs."
32. No doubt, the above covenant was held In that case, to exclude the implied covenant for title, and, the Court, therefore, held that, when the vendees had to pay a sum exceeding the purchase money to dear a prior mortgage, they had no remedy. But this decision, if I may say so with respect, was erroneous, and, was reversed by the Privy Council in Bhagwati v. Banarasi Das, 55 Ind App 135 at p. 138: (AIR 1928 PC 98 at p. 99).
33. Lord Shaw, who delivered the opinion of the Board, observed:
"With regard to the last portion of the sale deed, which states what is to ensue in the event of the vendees being put out of possession, it may, of course, be an additional safeguard, it may have been a thing suggested by the parties to cover contingencies which were not yet wholly foreseen, but that it contradicts or restricts the wider language of the contract of sale or that it either narrows or wipes out the obligations under the statute cannot be maintained."
In other words, their Lordships of the Privy Council held that it was a covenant for quiet enjoyment which did not exclude the implied covenant for title.
34. Exactly similar is the position here. The stipulation by the vendor in the sale deed in question that, if any legal or other defect in his title is found, in the future, he will be liable for the same, wag an express covenant for title and quiet enjoyment and an additional safeguard, but it did not exclude the implied covenant for title, and, as such, it cannot be considered to be a "contract to the contrary", within the meaning of Section 55 of the Act, as contended by the appellants.
35. The Privy Council, in Nathu Khan v. Burtonath Singh, AIR 1922 PC 176, which was a case under Section 55(l)(g) of the Act, held that, if a sale deed of properties, subject to a mortgage charge, contains an express declaration that the property was sold free from incumbrances, but it is found afterwards that there are previous charges thereon and the vendee is compelled to discharge the same in order to save the property purchased by him from being proceeded against by the previous charge-holders, the vendor under Section 55(l)(g), Sub-section (2), of the Act, is liable to the purchaser for moneys paid by him in discharge of the previous charges.
36. More to the point is the principle laid down by the Privy Council in Mt. Bhagwati's case. AIR 1928 PC 98, referred to before, which also was a case under Section 55(1) (g), of the Act. In that case, the language of the deed of sale recognised only one of the mortgages existing on the property sold prior to the transaction of sale, and made no mention of the others. The deed further provided that, apart from the one mortgage, the property in question was free up to the date of the transaction from all rights of transfer by sale, mortgage, etc. It was further stated therein, inter alia, as quoted earlier, that, if an encumbrance etc., was found in respect of the whole or part of the property sold, and, as a result of his claim, the property passed cut of the possession of the vendees, then the vendors should have certain obligations. The property in question did not pass out of the possession of the vendee, but he was forced in a Court of law to answer the rights of another mortgage-holder of a very considerable amount and to meet the claim. On these facts, it was held by the Privy Council that the sum was paid under compulsion and it was undoubtedly a payment for which the vendee was entitled to be recouped from the vendor of the property for a payment so made. The vendee's suit was, therefore, decreed.
37. In my opinion, the ratio decidendi of the above cases apply here also. The second contention is, also, therefore, rejected.
38. It follows, therefore, that, in the absence of a contract to the contrary, the vendee is entitled to maintain a suit, based on the breach of an express covenant contained in the conveyance itself, as here, for a refund of a portion of the consideration money, if he does not get possession of a portion of the vended property, on account of a defect or want of title in his vendor.
39. For the reasons given above, there is no merit in the appeal, and, accordingly, it is dismissed with costs.