M.A. Ansari, J.
1. The appellant is the legal representative of the 5th defendant in a suit to recover Ac. 1-50 cents of the plaint 'A' schedule property, as well as Rs. 1,000/- as damages. The property in 'A' Schedule was formerly comprised in Block Survey No. 447 of Palakoderu Village and belonged to one Tammayya who had two sons, Veerrafu and Rama-doss. The former is the plaintiff, and the latter is the father of the first and second defendants in this suit.
Tammayya who was a resident of the village Gollalukoderu had exchanged his property for what is mentioned in 'B' Schedule to the plaint. This property is situated in the village, of which Tammayya was a resident, and was exchanged apparently for the better enjoyment of the produce. The exchange is alleged to have taken place between him and one Kottapalli Nalla Bapiraju on or about 80-4-1886. Sometime later the daughter of Bapiraju filed O. S. No. 89 of 1900 in the District Munsif's Court, Bhimavaram, against the two sons of Tammayya.
This was for a decree to direct the registration of 'A' Schedule property in her name in therevenue accounts and of the 'B' Schedule property in the name of Veerraju and Ramadoss. The daughter's suit ended in a compromise and a decreein terms thereof was passed on 9-8-1900. It wouldbe useful to give the following extracts from theaforesaid decree, whose certified copy is Ex, A-1 :
(1) That the defendants shall enjoy as of right the plaintiff's jeroiti lands bearing Nos. 444 and 510 measuring Acs. 2-36 cents in Gbllalakederu village and to record the said land in the name of the defendants;
(2) That the plaintiff shall enjoy in exchange Acs. 2-20 cents out of service inams of defendants bearing No. 447 in Palakoderu and record the same in accounts in the name of the plaintiff;
(3) That, if for any reason, the said exchange fails, each shall take possession of his respective land mentioned above.
2. In chronological order the next important fact is that on 8-10-1900 the daughter, Gandiraju Bapanayya, sold to one Gadiraju Seetayya the 'A' Schedule property for Rs. 400/-. The property after the purchaser's death devolved on her two daughters, the first of these being the 5th defendant and the other, who had since died, being the wife of the third as well as the mother of the 4th defendant. The respondent has alleged that the alienation was for no consideration and was executed and delivered nominally in favour of the purchaser. The trial Court's opinion on the plea of the transaction being without consideration was conflicting.
At one point in his judgment he had thought the sale deed to have been nominally executed, but later in the same judgment he found the sale to be supported by consideration. The lower Appellate Court assumed the transaction to be for consideration. A Division Bench of this Court, of which one of us was a party, on 4-9-1957 called for a finding from the lower Appellate Court as to whether the 5th defendant's mother had purchased the suit land as a bona fide purchaser for consideration. The finding that has been returned is that the alienation was for consideration.
3. But to continue with the narration of events which has resulted in the litigation givingrise to this appeal, the plaintiff and his brother continued in possession of the 'B' Schedule property jointly till 1922. In that year they separated, whereby the plaintiff got Ac. 1-48 cents and the two nephews were given 87 cents. After the partition the plaintiff on 4-1-1935 sold his share of the land to Dharbha Subbaraidu.
This purchaser was subsequently dispossessed in consequence of the suit, which is O. S. No. 225 of 1940 on the file of the District Munsif's Court, Bhimavaram. The claim was filed by the 3rd defendant and his brother Bhupatiraju Venkata Rama Raju on the basis of their being reversioners of the daughter, who was the plaintiff in the compromise decree of 1900 and that alienation not being binding on them.
The claim was decreed and it is not denied that in execution of the decree which the reversioners got against the purchaser of the property from the plaintiff, the aforesaid purchaser was dispossessed. Consequently he gave notices to the plaintiff claiming Rs. 4,000/- as damages for the loss of the property.
4. The dispute was settled by payment of Rs. 2500/-, Rs. 1,500/- representing the sale price and the balance of Rs. 1,000/- being the cost of the litigation. Thereafter the plaintiff filed the suit giving rise to this appeal. Therein he has claimed from defendants 3, 4 and 5 the return of Ac. 1-50 cents of the 'A' Schedule property, which, ho has alleged, he is entitled to because of the loss of the property given in exchange of 1886 and the compromise decree of 1900.
Defendants 3 and 4 were ex parte, and the 5th defendant alone has contested. It may be mentioned that defendants 6 to 9 were representatives of the 1st defendant who had died. They and the remaining defendant naturally supported the claim. The trial Court had held that the plaintiff was entitled to Ac. 1-50 cents out of the plaint 'A' Schedule property and was further to get Rs. 1,000/- as damages, together with Rs. 117/-towards past profits from 1947. This decree has been partly sustained by the lower appellate Court which has dismissed the claim for damages holding that he was not entitled to Rs. 1,000/-. In other respects it has sustained the decree of the trial Court.
5. It is clear that a person having exchanged certain immovable property has lost what he had taken in the exchange, and is trying to recover what he had given from a transferee. Therefore the questions which require decision are whether the transfer is for value and whether the plaintiff in the circumstances of the case is entitled to claim the property notwithstanding its having been transferred.
We have gone through the finding of the District Judge on the issue that was sent to him earlier by the Division Bench of this Court. That finding is against the plaintiff on the ground that though he had alleged in the plaint about the sale in favour of the 5th defendant's mother being without consideration, as P.W.1 he had frankly admitted in the cross-examination of not having any knowledge about what happened in 1900.
The next reason for treating the sale to be genuine is that the deed recites the property as being conveyed for a sum of Rs. 400/- out of which Rs. 162-8-9 were payable to the purchaser on looking into the accounts under various heads and Rs. 237/7/3 were to be paid as the future maintenance of the vendor and that the vendor being maintained by the purchaser till she died was not disputed. We think both are cogent grounds for treating the transaction to be for value and genuine. After all the burden was on the plaintiff and not only he does not support the case, but even P.W.2 also does not suggest that the sale in favour of Seethayya was nominal.
The burden of proof not having been discharged, there is no reason to discredit the recitals particularly when the vendor continued to live with the purchaser and was being maintained by her. It therefore follows that the appellant's mother being bona fide purchaser of the property is firmly established in the case.
6. The next question is whether the plaintiff is entitled under the old Section 119 of the Transfer of Property Act to follow the property in the hands of such a person on his losing what he had taken at the exchange. The Section prior to the amending Act XX of 1929 was as follows :
'In the absence of a contract to the Contrary, the party deprived of the thing or part thereof he has received, in exchange, by reason of any defect in the title of the other property, is entitled at his option to compensation or to the return of the thing transferred by him.'
This provision is obviously based on the implied warranty of title, to which parties to exchange were entitled, under the Common Law. In this connection it would be useful to give extracts from the judgment of Seshagiri Iyer, J., in Veuraraghavulu v. Manikyam, AIR 1917 Mad 390. The learned Judge after referring to the Bustar's case, (1602) 76 ER 1114, summarises the common law rule in the following words ;
'As a corollary ...... it was held ....that title was warranted by the parties to the exchange ..... According to this statement of the law, there can be compensation for breach of warranty, or re-entry on the land exchanged and the right of their reliefs can be exercised only by the parries or their heirs, but it cannot be assigned or devised.'
The facts of Veeraraghavalu's case AIR 1917 Mad 390 were that the father-in-law of the 1st defendant had given what he had purchased from a Hindu widow to the plaintiff's brother in exchange for some of the properties. The widow's reversioner sued to set aside the original alienation and the plaintiff entered into a compromise with him by which a portion of the property exchanged was retained on payment of a further consideration to the reversioner.
The plaintiff asked for the restoration of the land given in exchange or for compensation and the Subordinate Judge had found the plaintiff entitled to Rs. 875/- as damages. The decree was reversed, but the High Court allowed the appeal giving the sum of Rs. 875/- as damages. Seshagiri Iyer, J., while allowing the appeal has held that the common law rule of implied warranty in ex-change was given a statutory recognition. Bake-well, J., also thought that the common law rule had been followed in Section 119.
That rule was that where the transaction was in the nature of exchange i.e., where estates of both, which were equal, were given and taken, there being equality in value, equality in quantity and equality in quality; under the common law the title was warranted by the parties to the exchange. This warranty when broken could be compensated or re-entry on the land exchanged could be claimed; but both did not extend to the assigners or the devisees of the parties to the exchange.
Having regard to this legal background it is clear that Section 119 of the Transfer of Property Act. before the amendment would not entitle a party to the exchange to recover the property exchanged from an alienee of the parties, because the warranty of title in exchange to which it gave the statutory recognition was never extended to such alienees. If that be the case of an ordinary assignee, a bona fide purchaser could not be in a worse position.
We therefore think the view is correct that Section 119 before amendment related only to the rights of the parties to the exchange inter se and their heirs. Consequently the decision in Ganga Singh v. Rago Ram. AIR 1934 Lah 934 (2), that there is no reason for holding the Section as extending to a third person who was not a party to the exchange is right.
We, however, think that the observation in the case concerning the correctness of Srinivasa Ayyangar v. Johnsa Rowther, ILR 42 Mad 690 : (AIR 1920 Mad 812 (1)) is not justified, as we shall presently show. We also think that the observation in Sujat Khan v. Nazafali, AIR 1934 Nag 61, that the warranty of title in exchange did not extend to a purchaser from one of the parties, is also correct, because under the common law warranty of title in such transaction had limited operation. Our attention however has been drawn to a decision by single Judge in Chidambara Thevar v. Swaminatha Rao, 1940-1 Mad LJ 248 : (AIR 1940 Mad 426), wherein old Section 119 was held as covering the assignee of a party to the exchange and for doing so the learned Judge relies on Srinivasa Ayyangar's case, ILR 42 Mad 690 : (AIR 1920 Mad 812 (1)). With respect to the learned Judge we think the Bench division does not go so far.
The facts of the last mentioned case were that the plaintiff had sued to recover possession of certain lands from the defendants which had been given to the latter in exchange for certain lands taken by the plaintiff's father under a deed of exchange. The deed had provided that 'should there arise any dispute in the matter of enjoyment of the property specified in the deed of exchange, each shall enjoy as before their respective lands.'
In execution of a decree obtained by a third party against the defendants, some of the lands obtained in exchange by the plaintiff's father were sold and some were also taken away in sales in execution of other decrees against the defendants. The plaintiff sued to recover possession of the land given by his father and to this claim was impleaded the 12th defendant, who had purchased one of the suit items. The learned Judges held the suit to be within limitation and they also rejected the plea of the property being in the hands of the bona fide purchaser, at page 692 (of ILR Mad): (at p. 812 of AIR) in these words :
'The further contention for the respondent that he cannot be bound as he is a bona fide purchaser for value without notice can be met by the fact that the transferee can obtain no larger estate than his transferor.'
It is therefore clear that the learned Judges had held the 12th defendant liable because of the defeasible estates created by the exchange and had not extended the warranty of title in transactions of exchange to cover an assignee. In this connection it should be noted that Bakewell, J., was a party to the earlier Division Bench of AIR 1917 Mad 390, wherein he had found Section 119 to be statutory recognition of the old common Law rule. That rule had limited operation and assignees of the parties to the exchange were excluded.
Srinivasa Ayyangar's case. ILR 42 Mad 690 : (AIR 1920 Mad 812 (1)) is therefore an authority, for the proposition that if parties to exchange create defeasible estates, a bona fide purchaser can acquire no higher title than that of his transferor. In other words the transfers by exchange may be made to cease in case a specified certain event happens and to such a condition Section 31 of the Transfer of Property Act would apply. On happening of the condition subsequently the estates created by the exchange would terminate and revert to the grantor.
The condition would also not operate as conditional limitation whereby an interest in a third person is created; but would cause the earlier estate to cease. All that is required is that it should be valid and there is nothing in the Act which says that the condition making a transfer terminable on the transferor losing the property he got, is invalid. Moreover the Court has the power to relieve against such a provision where pecuniary compensations be sufficient relief to the aggrieved party. Shortly put, Srinivasa Ayyangar's case, ILR 42 Mad 690 : (AIR 1920 Mad 812 (1)) has decided that the grantor can claim the property on the ground of his becoming entitled to the property due to the happening of the subsequent condition, and to such a claim being a purchaser for value is no defence.
The decision in these circumstances did not require any reference to Section 41 and it would not be correct to criticise it for failing to do so. Nor the view taken in 1940-1 Mad LJ 248 : (AIR 1940 Mad 426) that the benefit of the old Section 119 can be claimed against a transferee for value is correct. We think the learned Judge in extending the operation of the old Section 119 to such assignees failed to note the limited operation of the warranty of title in transactions of exchange.
Such being the true operation of the old Section 119 of the Transfer of Property Act, the respondent cannot invoke it against the appellant whom we have held to be a bona fide purchaser for value. It is however clear that by the compromise decree whose extracts, we have given earlier fn the judgment, the parties had created defeasible estates on any one losing what he had taken. It follows that on the respondent's losing what he got, the transfer in favour of the appellant's predecessor would cease. Such a condition has happened and therefore the respondent's claim has been rightly allowed. To such a claim there can be no defence of the appellant's being bona fide purchase.
7. It was argued before us that the exact nature of the estate created under the original exchange is not known, as the document is not available. The bona fide purchase for value in this case is after the compromise decree which must be taken as finally governing the relation between the parties. Therefore the appellant's vendor got only a terminable estate and so did the plaintiff.
The condition had happened in the sense that the property in 'A' Schedule had been lost and the plaintiff therefore had become entitled to his property contained in Schedule 'B'. It is true that the Court can relieve against the condition, but nothing had been shown about money being adequate compensation to the plaintiff. In these circumstances this appeal fails and is dismissed with costs of this Court and proportionate costs of lower Court as provided by the lower Appellate Court.