1. This is an originating summons taken out by the purchaser of a block of buildings known as Sethna House and Sethna Cottage on the Carmichael Road for the price of Rs. 8,00,000. The contract was an open contract. It is common ground that the late Mr. R. D. Sethna purchased a large plot of land which included the property in question. From time to time parcels of that larger area were sold to Sir Homi Mehta, Amritlal Amarchand and Khimji Assur Virjee. The rest is sold to the plaintiff in this suit. The plaintiff has purchased two lots. In respect of one the vendors still hold a portion and there is no dispute between the parties in respect of the covenant to produce title-deeds which cover that lot, In respect of the other lot where the vendors do not own any portion of the land covered by the original deed the parties have come to Court to determine whether the defendants are entitled to retain the title-deeds as claimed by them in the correspondence. The purchaser has completed the sale under protest and has taken out this summons to determine his right to recover those title-deeds from the defendants.
2. On behalf of the plaintiff it is argued that the last lot having been sold under Section 55(5) of the Transfer of Property Act he is entitled to possession of the title-deeds. It is contended that so long as any portion of the land covered by the original sale-deed remained vested in the vendors they could hold the title-deeds, but when the last lot was sold they had no right to retain the title-deeds. On behalf of the defendants it is argued that they had given a covenant to different purchasers to produce title-deeds, and because the plaintiff is the purchaser of the last lot he is not entitled to possession of the title-deeds. The vendors having given to different purchasers of different lots a personal: covenant to produce title-deeds the purchaser of the last lot could not insist on the delivery of the title-deeds to him. In support of that contention they relied on Wright v. Robotham (1886) 33 Ch. D. 106 and Re Jenkins and Commercial Electric Theatre Company's Contract (1917) 61 S.J. 283. In the last case it appears to be assumed that the case was covered by Wright v. Robotham, although in fact the principle was considerably extended.
3. In my opinion Section 55(3) of the Transfer of Property Act covers the case As I read that Sub-clause the rights of the parties appear to be clear. The sub-clause runs as follows:
(3) Where the whole of the purchase-money has been paid to the seller, he is also bound to deliver to the buyer all documents of title relating to the property which are in the seller's possession or power:
Provided that (a) where the seller retains any part of the property comprised in such documents, he is entitled to retain them all, and (6) where the whole of such property is sold to different buyers, the buyer of the lot of greatest value is entitled to such documents. But in case (a) the seller, and in case (b) the buyer of the lot of greatest value, is bound, upon every reasonable request by the buyer, or by any of the other buyers, as the case may be, and at the cost of the person making the request, to produce the said documents and furnish such true copies thereof or extracts therefrom as he may require; and in the meantime, the seller, or the buyer of the lot of greatest value, as the case may be, shall keep the said documents safe, uncancelled and undefaced, unless prevented from so doing by fire or other inevitable-accident.
The plain meaning of this Sub-Section seems to be that all documents of title which in any manner relate to the property sold must be delivered to the purchaser by the vendor. The exceptions are in the proviso. On behalf of the defendants it is conceded that the proviso does not cover the facts here. The defendants do not retain now any portion of the property comprised in the first document and they are not concerned with the rights under the second part of the proviso. The reason is that the present plaintiff is certainly the-purchaser of the lot of greatest value of the land covered by the original conveyance. Having regard to the clear words of Section 55 (3) there appears to me no doubt that the defendants' contention that they are entitled to retain the title-deeds and not part with them to the purchaser is unsound. The first question raised in the originating summons must be answered accordingly. Having regard to the clear wording of Section 55(3) the two English decisions mentioned above do not help the defendants.
4. The next question is as regards the form of the covenant to be given by the plaintiff to the defendants. This is necessary because the defendants have in their turn, when selling the other portions previously, given covenants to the purchasers, as required by law, to produce the title-deeds to them. One possible view is that that covenant on the sale of the remainder land to the present plaintiff passes as a covenant running with the land and the present plaintiff becomes liable to perform the covenants. In Davidson's Forms and Precedents of Conveyancing, Vol. II, Part 1 (4th edn.) at p. 664, there is a discussion as to the form of the covenant the vendor of the last lot is entitled to receive from the purchaser. It shows that the vendor must give up the title-deeds to the last purchaser and the form of covenant is found at p. 670 (Form No. 96). When the draft of the conveyance was passing to and fro it appears that this form was not exactly followed. The result is that the defendants now contend that they were never offered a covenant in the form they are entitled to. The correspondence however clearly shows that the defendants had contended that they were not bound to give over the title-deeds with or without any covenant. Their contention was that the plaintiff should approach the previous purchasers and either enter into covenants with them or obtain from them a release in favour of the defendants before he got the title-deeds. According to the form mentioned above no such right is shown to exist in the defendants. The covenant to which they are entitled (as briefly summarised in the foot-note at p. 664) is that the purchaser will produce the deeds and indemnify the vendors against their liability to produce the deeds under their covenants found in the previous conveyances. The learned Counsel appearing for the plaintiff states that his client has always been ready and willing to do so. It is true that in the correspondence prior to the suit a covenant in these terms was not offered. The conveyance has been completed and now a separate deed containing the covenant will have to be drawn up. As stated in Davidson the purchaser will have to recite that he had notice of the covenants previously given to the purchasers by the vendors. The parties are agreed that on the footing of this judgment the covenant in Form No. 96 in Davidson's Forms and Precedents of Conveyancing will meet the exigencies of the case. The answer to the second question therefore will be that the covenant will run in accordance with Form No. 96, at pp. 670-672, of Part 1, Volume II, of Davidson's Forms and Precedents of Conveyancing (4th edn.). The notice of the covenant and the fact that a separate deed of covenant has been passed will be endorsed on the conveyance.
5. Under the agreement for sale the parties had agreed that the costs of solicitors of each party should be borne by themselves but the out-of-pocket charges were to be borne by them equally. Under the circumstances I direct that the costs of preparing the deed of covenant should be borne in accordance with the agreement for sale between the parties both as regards the out-of-pocket expenses and the solicitors' own charges. As regards the costs of the suit it is clear that it became necessary because the defendants had taken up a contention that they were not bound to give over the title-deeds at all. As in my opinion that contention was incorrect, the defendants as representing the estate of Mr. R. D. Sethna should pay the costs of the suit out of the estate of the deceased come to their hands.