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The Andhra Paper Mills Co. Ltd. (In Liquidation) Vs. State of Andhra (Now Andhra Pradesh) - Court Judgment

LegalCrystal Citation
CourtAndhra Pradesh High Court
Decided On
Case NumberAppeal No. 531 of 1955
Reported inAIR1961AP57
ActsTransfer of Property Act, 1882 - Sections 55(1); Indian Contract Act, 1872 - Sections 69 and 70
AppellantThe Andhra Paper Mills Co. Ltd. (In Liquidation)
RespondentState of Andhra (Now Andhra Pradesh)
Appellant AdvocateC.E. Padmanabhan, Adv. of Short, Bewes and Co. and ;K. Ramchandra Rao, Adv.
Respondent AdvocatePrincipal Govt. Pleader and ;Vepa P. Sarathi, Adv.
Disposition Appeal dismissed
.....petitioner company went into liquidation - plaintiff made payment to legal advisor for drafting of sale deed in favour of government - application for reimbursement declined by government - plaintiff neither interested in making payment on behalf of government nor bound by law - conditions under section 69 not satisfied - held, government not liable to make reimbursement for payment. - motor vehicles act (59 of 1988)section 149 (2): [v. gopala gowda & jawad rahim, jj] insurers entitlement to defend the action joint appeal by insured and insurer - held, the language employed in enacting sub-section (2) of section 149 appears to be plain and simple and there is no ambiguity in it. it shows that when an insurer is impleaded and has been given notice of the case, it is entitled to defend..........on 17-5-1848 and the purchase money was fully paid to the plaintiff in about six months later. no sale deed, however, was drawn up until the year 1952.according to the plaint case (and this averment is not denied by the defendant) in july 1952 m/s. short, bewes and co., who were the legal advisers of the liquidator, forwarded to tho pleader doing government work in the state of madras a draft of the sale deed to be executed by the liquidator and in their letter accompanying it stated that arrangements were being made for the due execution of the deed and that the government should be ready with the sum of rs. 10,000/- being the registration charges for tho document of sale. on 9-12-1952 messrs. short, bewes and co., were advised by the government pleader that the money was ready and a.....

Bhimasankaram, J.

1. The appellant filed the suit out of which this appeal arises against the State of Andhra, now Andhra Pradesh for recovery of a sum of RS. 25,000/- in the following circumstances.

2. The Andhra Paper Mills Co. Limited went Into liquidation and tho appellant who was the Official Liquidator of the Madras High Court was in charge of the liquidation proceedings. Certain properties, moveable and immovable belonging to the Company were purchased from him by the State of Madras for a sum of Rs. 25 lakhs in the year 1948 and the transaction was approved by the Madras High Court which at that time had jurisdiction in the matter. The Government obtained possession of the properties purchased by them on 17-5-1848 and the purchase money was fully paid to the plaintiff in about six months later. No sale deed, however, was drawn up until the year 1952.

According to the plaint case (and this averment is not denied by the defendant) in July 1952 M/s. Short, Bewes and Co., who were the legal advisers of the liquidator, forwarded to tho pleader doing Government work in the State of Madras a draft of the sale deed to be executed by the liquidator and in their letter accompanying it stated that arrangements were being made for the due execution of the deed and that the Government should be ready with the sum of Rs. 10,000/- being the registration charges for tho document of sale. On 9-12-1952 Messrs. Short, Bewes and Co., were advised by the Government Pleader that the money was ready and a date might be fixed for the re-gistration of the deed. The document was actually registered on 7-1-1953, the Government paying only tho necessary registration charges, being exempt from liability to pay the stamp duty.

3. Some time after tho registration, Messrs, Short, Bewes and Co., submitted to the plaintiff a bill for a sum of Rs. 25,000/- for their services in preparing the deed. The plaintiff paid the sum and, as according to him, all the expenses in connection with the conveyance should be incurred by the vendee, he filed the present suit for the recovery of that sum from the State of Andhra (since, the Stale of Andhra Pradesh) which is answerable under law -- this is not in dispute --for all the liabilities that the Madras State should have carried with regard to this matter but for the Andhra State Act No. XXX of 1953.

4. The case of the plaintiff is that Messrs. Short, Bowes and Co., submitted a draft sale deed for approval of the Government and that the legal advisers of the Government, after revising it, approved of it and it was that draft that was ultimately engrossed upon tho deal that was registered. He says that be is entitled to claim the sum from the State either, under Section 69 or under Section 70 of tho Indian Contract Act, Before we enter into the merits of tho claim, wo consider it necessary to read the relevant passage in the plaint. In paragraph 4 of the plaint it is stated as follows:--

'The plaintiff submits that although the Government entered into possession of the Mills as early as May 1948, the document of sale was not executed or registered till the plaintiff's legal Advisers Messrs. Short Bewes and Co., moved in the matter some time in June 1952, sending a draft sale deed to the Government Pleader. In so doing they never intended to do anything gratuitously. The Government Pleader, acting for the defendant-Government, replied on 18-7-1952 intimating that the defendant duly approved of the draft sale deed and that necessary arrangements may be made for the execution of tho deed by the plaintiff'.

In para 6 of the plaint, it is stated that the Government.

'as vendees were bound to meet all the charges and expenses of sale, in the absence of a eon-tract to the contrary.'

This point is amplified in para 7 of the plaint, wherein it is asserted that

'the purchaser-Government should bear all the expenses of sale and that it was their duty to tender a proper conveyance to the plaintiff and that the party so charged with that duty must perform the duty themselves or pay for its performance by another.'

5. In view of these allegations as to a buyer's duties, we would first refer to Section 55 of the Transfer of Property Act which enacts the law relating to tho rights and liabilities of buyer and seller in the absence of a contract to the contrary. The portion of that section which is relevant is Clause (d) Sub-section (1) of that Section which says that the Seller is bound on payment or tender of the amount due in respect of the price, to execute a proper conveyance of the property when the buyer tenders it to him for execution at a proper time and place.

It is found stated in some of the commentaries of the Contract Act and also in some cases that it is the duty of the buyer to tender a conveyance. This statement is liable to be misunderstood. I' does not mean that the buyer is under an obligation to the seller to tender a conveyance and that if he does not do it, the seller can compel him to do so; it really means that tho seller himself is not under a duty to tender a conveyance and that the buyer, if he has not tendered a conveyance, has no right to complain that the seller has not executed one.

Therefore it cannot be said that if a seller himself prepares a conveyance, he is doing something which the buyer is under law bound to do. It is true that as between the seller and buyer, the seller need not do anything at all as regards the tendering of a conveyance. If the buyer is not interested in obtaining a conveyance, he takes the consequences whatever they are. But he is not com-pellable by anybody to tender it. In the present case the Government could have waited indefinitely without asking for the execution of a conveyance although it was manifestly to their interest to take a sale deed; but nobody could compel them to do it; nor can it be said that the law required them to do so.

6. We shall now proceed to consider the applicability of Sections 69 and 70 of the Indian Contract Act to the facts of the case which, we may say, are not really in dispute. These sections are in these terms:

'69. A person who is interested in the payment of money which another is hound by law to Pay- and who therefore pays it, is entitled to be reimbursed by the other.

70. Where a person lawfully does anything for another person, or delivers anything to him, not intending to do so gratuitously, and such other person enjoys the benefit thereof, the latter is hound to make compensation to the former in respect of, or to restore, the thing so clone or delivered.'

We shall deal first with the claim under Section 70 because it is more convenient to do so. The conditions necessary for the applicability of Section 70 are A person should do something for another person or deliver anything to him; what he does or delivers should have been lawfully done or delivered; he should not have intended to do it gratuitously; the person for whom the thing is done or to whom the thing is delivered should have enjoyed the benefit thereof.

7. Now in the present case, what has happened is that the plaintiff has paid a sum of money to M/s. Short, Bewes & Co. He has not delivered anything to the Government. The question therefore is whether, in making the payment the plain-tiff could be said to have done anything for the Government. In the allegations above extracted from the plaint, there is no statement that the plaintiff himself did anything for the Government. What is stated in paragraphs 4, 6 and 7 is that M/s. Short, Bewes & Co., when they prepared the draft sale deed did not intend to do it gratuitously and as it was the duty of the Government to render a proper conveyance to the plaintiff, they must either perform that duty or pay for its performance by another. The language used in these paragraphs' would seem to indicate a claim rather under Section 69 than one under Section 70 of the Contract Act, although the words 'not intending to do so gra-tuitously' which occur in Section 70 are adopted in paragraph 4 of the plaint.

It is the case of the plaintiff himself, as stated by P. W. 1 (a partner of thc liquidator) that it is the liquidator who instructed M/s. Short, Bewes & Co., to prepare a draft and send it on to Government for approval. From the evidence it would appear that in the year 1948, M/s. Short, Bewes and Co., forwarded a draft to the then Government Pleader, but it is not made clear as to what happened to that. Indeed the plaint makes no mention of that draft.

The plaint, as is clear from the allegations in para 4 quoted above, refers to the sending of a draft sale deed some time in June 1952. It is with reference to that draft that P. W. 1 has stated that the liquidator gave instructions to his legal advisers to prepare one and send it on to the Government for its approval, if, therefore, M/s. Short, Bewes, & Co., prepared a draft in the year 1952, they did so under instructions of their own client. A solicitor when he prepares any document under instructions from his client is acting only for him and not for any other.

So M/s. Short, Bewes & Co., in preparing the sale deed, cannot be said to have done it for a third party, that is for tho Government. Nor can it be reasonably said that when the liquidator paid M/s. Short, Bewes & Co. for that service he was making the payment for another; still less can it be said that by that payment, as such, the Government received and enjoyed any benefit. Moreover, as observed by the Privy Council in Ramtuhul Singh v. Biseswar Lal, 2 Ind App 131:.

'. .it is not in every case in which a man has benefited by the money of another, that an obligation to repay the money arises ..... To support such a suit there must be an obligation express or implied to repay.'

8. It is no doubt true that a solicitor is not to be supposed to have intended to do any professional service gratuitously but if he was doing it under instructions from his client, he must look to his own client for reimbursement. Jf the solicitors in this case forwarded the draft deed to the Government they did so at the request of their client. Although the buyer cannot insist that the seller should tender a conveyance, he may well accept one that the seller tenders to him. The correspondence would show that the Official Liquidator being an officer under tho supervision of tho Court was anxious to complete the transaction although he had already been paid the full purchase money. If one looks at tho matter from the point of view of an ordinary vendor and vendee, the plaintiff could hardly bo said to have been any longer interested in what remained to be done to complete the transaction.

9. We may add that it is a matter of some doubt whether a case of payment of money to a third person for another would at all be covered by Section 70 of tho Indian Contract Act, the more appropriate section being, perhaps, Section 69: vide Sheo Nath Prasad v. Sarjoo Nonia AIR 1943 All 220 (FB).

10. Therefore, it seems to us that unless the plaintiff is able to establish that he has a right to recover this amount under Section 69, he must fail.

11. Now, in order that Section 69 may apply the person who claims reimbursement must satisfy these two conditions. He must show firstly that he was interested in paying the money and secondly, that the other person was bound by law to pay it. In our opinion, neither of these conditions of Section 69 is fulfilled in this case. It cannot be said that the plaintiff was interested in paying any money to M/s. Short, Bewes & Co., for services rendered by them to the Government -- even it the services are to bo considered as having been rendered to the latter.

He might himself have been liable to pay ior the services asked for by him; and if be acted as the agent (by express or implicit authorisation) of the Government, he would not bo liable at all on his own account hut in neither case could he be said to be interested in making a payment which another was bound to make, oven if his solicitors rendered their services to the Government at his request. nO case of compensation to an agent for expenses incurred hy him on account of his principal has been set up in the plaint or raided in the Court below or argued before us. Nor is it even asserted that the liquidator was in any way interested in paying the money.

As regards the second condition, the position is no less clear against the claim. The only reasonable way of attempting to show that this condition has been fulfilled is by showing that the Government was bound to make the payment tc M/s. Short, Bewes & Co. Now it is not contended that the Government ever asked for the services of these solicitors: The Government had their own legal advisers and were in no need of other assistance: Nor can it be said, as already shown, that M/s. Short, Bewes & Co., were as a matter of iact acting for the Government.

12. We may observe before concluding that the plaint does not specify with any degree of clarity the basis upon which the claim is based.

13. We wish also to make here some observations on the factual aspects of the case. The trial Court has found that there is no proof that M/s. Short, Bewes & Co., sent a fresh draft sale-deed to the Government some time in June 1952, as alleged in para 4 of the plaint with respect to which the suit claim is made. It has pointed out, further, that although M/s. Short, Bewes & Co., addressed four communications to the Government Pleader or Solicitor in none of them was there any hint that the Government would be exposed to this heavy claim.

It is worthy of note that all that the junior partner of M/s. Short, Bewes & Co., Mr. Neelakantam seems to have done when he submitted the draft in 1918, was substantially to transcribe Form No. 208 in Vol. 12 Underbill's Encyclopaedia of Forms and Precedents, as borne out from Ex. B-3 dated 30-4-1948. That was subsequently revised and Pre-sumably adopted to suit the facts of the case by the Government Pleader and Solicitor. Then again the claim made by the plaintiff, for the charges, as set out in Ex. A-9, a communication dated 20-1-1953 addressed by him to the Secretary to the Government of Madras, is for fees for 'preparing and registering' the deed of conveyance.

There is no evidence as to the exact nature of the services M/s. Short, Bewes & Co., are supposed to have rendered to the Government at the time of the registration, p. W. 1 has nothing to say about that, and the Government must undoubtedly have been represented by its own legal agents at the time of the registration. It cannot be right and proper that the Government should pay not only their legal advisers for revising a draft deed based upon a standard form and also for investigation of the title -- which latter service really is perhaps the most substantial part of a legal adviser's service in a transaction of sale -- and for assistance at registration as well as for service rendered by M/s, Short Bewes & Co.

The latter, it would be reasonable to suppose, were doing sewices to their own client to help him to complete the transaction, although he was under no further obligation to the buyer than to execute a tendered conveyance. It may also be noticed that although the deed may have to be tendered by the buyer, the seller may well have to consult his legal advisers before executing it. In this case instead of waiting to approve a draft prepared by the Government's solicitors, the plaintiffs' solicitors copied out a standard form of conveyance and despatched it to the Government Solicitor in order that a proper conveyance may eventually result. When a seller's solicitor approves a draft prepared by the buyer or submits to the buyer a draft he is prepared to approve, he is surely not discharging any obligation towards the buyer.

14. For these reasons, we think that the decision of the lower Court dismissing the plaintiff's suit was right and accordingly direct that this appeal should be dismissed with costs.

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