Skip to content


Parshotam Parshad Vs. Taimur Ali Shah and ors. - Court Judgment

LegalCrystal Citation
SubjectProperty;Civil
CourtAllahabad
Decided On
Reported inAIR1945All39
AppellantParshotam Parshad
RespondentTaimur Ali Shah and ors.
Excerpt:
.....the property sought to be sold stands mortgaged with possession has not been cleared up and as a sale deed of the property aforesaid cannot be completed until the account has been cleared up, i do covenant that i shall without fail clear up the account of the said bank within a month and have the said sale deed completed and registered. if i fail to get the sale deed completed with my signature and those of the witnesses and have the same registered the lala saheb aforesaid shall be authorised to have the sale deed registered through the court. the learned judges had no difficulty in repelling the argument put before them that there was a presumption in favour of the vendor and they might well hold as i think they did on the interpretation of the deed of sale that there was nothing to..........on the other hand parshotam parshad was to forfeit the earnest money if he failed to get the sale deed registered within that period. the fact that the property was subject to the usufructuary mortgage of 4th december 1925 was specifically mentioned in the agreement but it was not stated whether the vendor or the vendee would be liable for the payment of the mortgage money. it was further recited that the whole property had passed to taimur ali shah under a deed of gift executed by his mother in 1928. on 6th december 1937, taimur ali shah executed a further' agreement in which he said:the property sought, to be sold stands mortgaged to the hira bullion bank.... it is necessary that the account of the said bank should be cleared up. it was agreed that time for a month should be.....
Judgment:

Allsop, J.

1. On 4th December 1925 Taimur Ali Shah and his wife and mother executed a deed of usufructuary mortgage in favour of the Hira Bullion Bank in order to secure a debt of Rs. 5000. The property mortgaged consisted of a house with the land appurtenant to it, an area of 22 big has odd in Khata No. 6/l/2, an area of 4 bighas 3 biswas in Khata No. 9 and an area of 6 bighas 4 biswas in Khata No. 11. Interest was to be paid on the sum of Rs. 5000 at the rate of 12 per cent. per annum and the mortgagors undertook to accept a theka of the mortgaged property at a rent Rs. 600 a year (equivalent to the interest) and to induce their tenants to enter into an agreement to pay this sum directly to the mortgagees. On 12th November 1937 Taimur Ali Shah alone executed an agreement to sell the two properties in Khatas 9 and 11 (which by that time had been renumbered 10 and 12 respectively) to Parshotam Parshad for Rs. 10,350. He acknowledged the receipt of Rs. 500 by way of earnest money and undertook to execute a conveyance within a period of one month. On the other hand Parshotam Parshad was to forfeit the earnest money if he failed to get the sale deed registered within that period. The fact that the property was subject to the usufructuary mortgage of 4th December 1925 was specifically mentioned in the agreement but it was not stated whether the vendor or the vendee would be liable for the payment of the mortgage money. It was further recited that the whole property had passed to Taimur Ali Shah under a deed of gift executed by his mother in 1928. On 6th December 1937, Taimur Ali Shah executed a further' agreement in which he said:

The property sought, to be sold stands mortgaged to the Hira Bullion Bank.... It is necessary that the account of the said Bank should be cleared up. It was agreed that time for a month should be allowed for clearing the account and completing the sale deed. But as the account of the said Bank where the property sought to be sold stands mortgaged with possession has not been cleared up and as a sale deed of the property aforesaid cannot be completed until the account has been cleared up, I do covenant that I shall without fail clear up the account of the said Bank within a month and have the said sale deed completed and registered. I shall abide by the conditions of the agreement aforesaid dated 12th November 1937 in every way. If I fail to get the sale deed completed with my signature and those of the witnesses and have the same registered the Lala Saheb aforesaid shall be authorised to have the sale deed registered through the Court.... It is further stated that the agreement dated today has been executed for extending time.

2. On 5th January, 20th January, 29th January, 15th February and 24th February 1938, Taimur Ali Shah wrote letters to Parshottam Parshad asking for extensions of time for executing the sale deed on the ground that he had not been able for various reasons to settle the account. In the last letter he asked for time up to 11th March. On that date Parshotam Parshad sent him a telegram saying that the time allowed had expired and threatening him with a suit for specific performance. On 4th July 1988 Taimur Ali Shah wrote another letter to Parshottam Parshad in which he said that he was instituting a suit against the Hira Bullion Bank 'for a declaration of the fact as to what amount is due to it and requested that no legal proceedings should be instituted till the suit was decided. It does not appear that any such suit was filed.

3. Eventually on 14th February 1939, Parshotam Parshad instituted the suit for specific performance which has given rise to this appeal. He impleaded Taimur Ali Shah, the Hira Bullion Bank and one Lala Sarju Parshad who had purchased the property at a sale in execution of a decree but with whom we are no longer concerned because the sale in his favour was subsequently set aside while the suit was pending in the lower Court. The relief claimed was that a decree for completion of the contract might be passed and defendant 1 (that is, Taimur Ali Shah) should be ordered to execute and complete a sale deed in favour of the plaintiff for Rs. 9850 out of which Rs. 5000 or whatever amount the Court might adjudge might be left with him for payment to defendant 2 (that is, the Hira Bullion Bank). The Bank alleged that it had been wrongly impleaded and that no point relating to the mortgage could be settled in the suit but that it had no objection to a decree if the plaintiff paid to it the full amount due which included a sum of Rs. 1500 on account of 'revenue et cetera.' Taimur Ali Shah pleaded in his written statement that the property was worth Rs. 62,500 (which seems to have been irrelevant) and that it was agreed between the parties that 'the amount of defendant 2 would be settled.' that it would release the property on taking a small amount and that the sale deed could then be executed, but that nothing had been settled with the Bank, which was not ready to release the property in dispute, and in the circumstances the plaintiff had no right to sue for the completion of the contract. In a further statement made under Order 10, Rule 2, Civil P.C. he said that his real intention had been to borrow Rs. 500 but that he could not do so without executing the agreement and that he had consented to do so under the belief, since falsified, that the value of the property would be greatly reduced by impending legislation in favour of agricultural tenants. After the suit had been pending for more than a year Taimur Ali Shah made an application to be allowed to amend his written statement and to raise the plea that he had been induced to execute the agreement by misrepresentations made by the plaintiff. This application was rightly rejected because the' allegation was made much too late.

4. The learned Judge dismissed the suit upon two grounds. He held, in the first place, that the ascertainment of the exact amount due under the mortgage was a condition precedent to the execution of the deed of sale and that it had not been fulfilled and in the second place, that it was impossible for him to pass a decree for specific performance without knowing the exact amount due to the mortgagee and that he had no material before him to enable him to ascertain that amount. It has been argued before us that we are precluded by the provisions of Section 92, Evidence Act, from going outside the terms of the agreement for the sale of the property and if we confine ourselves to those terms, we should hold that Taimur Ali Shah contracted to sell the property free from encumbrances because there is a statutory presumption to that effect embodied in Section 55, T.P. Act. In answer to the argument on the basis of Section 92, Evidence Act, it is sufficient to point out that Taimur Ali Shah was pleading a condition precedent proof of which is permitted by proviso 3 to the section. As for the second part of the argument, I must say I find no justification in the provisions of Section 55, T.P. Act, for the proposition that there is a presumption that encumbered property is sold free from encumbrances. In so far as they are relevant the terms of the section are as follows:

In the absence of a contract to the contrary... the seller is bound...except where the property is sold subject to encumbrances to discharge all encumbrances on the property then existing (and)...the buyer is bound...to pay the principal money due on any encumbrances subject to which the property is sold.

If the alleged presumption had been, created by the statute the words 'except where the property is sold subject to encumbrances would not have appeared and no obligation would have been placed on the buyer. Cases in which the buyer was to discharge the encumbrances would be governed by an express 'contract to the contrary.' As it is, it seems to me that the liabilities of the seller and the buyer in this matter depend upon the question whether the property has or has not been sold subject to encumbrances, and that is a question of fact which must be determined in each case on the interpretation of the document evidencing the agreement. We have been referred to the case in Jugul Kishore v. Banwari Lal : AIR1929All791 It is true that the learned Judges said that Section 55 (1) (g), T.P. Act, required that there should be a specific contract set forth in the sale deed that the property was sold subject to encumbrances if the vendor was not to be liable but that dictum was wider than was necessary to support the decision. That was a case in which the existence of the encumbrance was not mentioned in the sale deed at all. It was stated that the vendor was selling property which he had purchased at a sale in execution of a decree and though the existence of the encumbrance was certainly mentioned in the proclamation of sale, there was no evidence that the contents of the proclamation had been brought to the notice of the vendee. The learned Judges had no difficulty in repelling the argument put before them that there was a presumption in favour of the vendor and they might well hold as I think they did on the interpretation of the deed of sale that there was nothing to indicate that the vendee had contracted to discharge an encumbrance of which he might have had no knowledge. I cannot assume that they would have held the vendor to be liable in a case where it could be inferred from the terms of the agreement or deed that it was the intention of the parties that the vendee should pay merely on the ground that it was not stated in so many words that the property was being sold subject to encumbrances. In the agreement with which we are concerned Taimur Ali Shah contracted to sell property subject to a mortgage and to sell it for a fixed price without any reference to the discharge of the mortgage or the retention of any part of the consideration by the vendee for payment to the mortgagee. In the circumstances and in view of the general form of conveyances in this country I should be inclined to hold, if I were confined to the terms of the agreement alone, that the property was being sold subject to the encumbrance and consequently that the appeal should be dismissed on the ground that the appellant had not expressed his willingness in the Court below to pay the full price mentioned in the agreement. The argument that we should not go outside the agreement cannot prevail and, if it could prevail, it would in my judgment be destructive of the appellant's case.

5. We have next to consider whether the learned Judge was right in holding that the ascertainment of the exact amount due on the mortgage was a condition precedent to the execution of the deed of sale. The evidence consists of the statement of Taimur Ali Shah on one side and the statements of the plaintiff, Parshotam Parshad, of the plaintiff's cousin, Parmatma Saran, and of a man called Badri Parshad on the other. Parmatma Saran and the plaintiff are members of the same joint Hindu family and there can be no doubt that their interests are identical. Badri Parsad describes himself as a broker and learned Counsel for the plaintiff claims him as an independent witness but he appears to have been acting on behalf of the plaintiff because he and the plaintiff both say that he settled the terms of the agreement with Taimur Ali Shah. Even if he was in a sense independent it is probable that it would be in his interests to keep on good terms with a business family rather than support an individual such as the main defendant with whom he is not likely to have any further contracts. He does not appear to be a man of any status and the learned Judge who saw him did not rely upon his. statement. In these circumstances it would not be wise for us in my judgment to set aside the finding of the learned Judge on the basis of his evidence.

6. All the witnesses agree that there was some discussion about the payment of the mortgage money. Parmatma Saran says that Taimur Ali Shah agreed to leave the amount due to the mortgagee in the hands of the plaintiff but admits that the amount was not known. Badri Parshad and the plaintiff say that the principal amount due was known to be Rs. 5,000 but that the main defendant promised to allow the plaintiff to retain the whole amount of the mortgage money. They all say that there was no agreement that the deed of sale should not be executed till the amount due was ascertained. The learned Judge has pointed out in effect that it is impossible to believe this allegation for the simple reason that it is not possible to conceive in what terms the deed of sale could have been drafted if the amount had not been ascertained. The plaintiff/would not have paid the full consideration in the hope of recovering the amount due afterwards from the main defendant. He is not willing to do that now and his evidence is that he was not required to do so at any time. Taimur Ali Shah certainly would never have agreed after parting with his property to allow the plaintiff to keep the whole amount of consideration for some indefinite time till the mortgage was redeemed. The conclusion seems inescapable that the parties intended that the deed should be executed only when it was known what part of the consideration was to be paid to the main defendant and what part was to be retained by the plaintiff for the discharge of the encumbrance. Learned Counsel for the plaintiff has urged that his client would not have accepted an arrangement by which the ultimate sale of the property would have depended entirely upon the willingness of Taimur Ali Shah to conclude a settlement with the Bank but there is no force in this argument because there was nothing to prevent the plaintiff from entering into negotiations with the Bank himself and discovering what amount was legally due on the mortgage. It happens that the plaintiff is anxious to buy and Taimur Ali Shah, as it appears from his admissions and subsequent conduct, is reluctant to sell but in other circumstances things might have been the other way and it is not at all improbable that the plaintiff at the time of the agreement should have reserved the right to resile from the contract if, on inquiry, it had proved disadvantageous to him as, for instance, if the mortgage debt had been found to be greater than the consideration which the plaintiff was willing to pay. In these circumstances I think the learned Judge was right in accepting the evidence of the main defendant and I certainly could not hold positively that he was wrong.

7. This finding would be sufficient for the disposal of the appeal but I may add that the learned Judge's other argument appears to be unanswerable. It was clearly impossible for him and is equally impossible for us to pass a decree for specific performance without knowing how much money was to be paid to the defendant and how much was to be retained by the plaintiff or paid to the bank. There is admittedly no material on the record upon which this point could be decided. It is argued on behalf of the plaintiff that the learned Judge shut out the necessary evidence but there is nothing in our printed record which could justify this argument. If the plaintiff wished to rely upon some order passed by the learned Judge he should have made it available to us and indeed our attention was not drawn to any order which, though not printed is on the record. We have been referred to the case in Ram Sundar v. Kali Narain : AIR1927Cal889 in which Ghose J. quoted the remarks of their Lordships of the Privy Council in New Beerbhoom Coal Co. v. Bularam Mahata ('80) 5 Cal. 932. If the lower Court had found that there was, properly speaking, no condition precedent and if the plaintiff had placed material before the Court to enable it to decide how much was due on the mortgage it would doubtless have been bound to make a decision upon that material and pass a decree accordingly but anybody who asks for a decree must bear the burden of putting the Court in a position to pass it and cannot, in any circumstances, shift that burden on to the Court itself. The fact is that neither party knew at the time of the agreement in what terms the deed of sale was to be drawn up. Neither party knew at the time of the institution of the suit and neither party knows even now. Parmatma Saran admitted that the plaintiff made no inquiries from the bank and that the amount set down as due to the bank was an approximate amount. In the course of the suit, the plaintiff made no attempt by means of interrogatories, or by summoning the accounts of the bank or by producing other evidence to discover the amount due on the mortgage. He has throughout been much too detached and it appears that he has been anxious to avoid all risk and responsibility and to cast the burden upon the main defendant. The result is that it is impossible to pass a decree in his favour. I would dismiss the appeal with costs.

Mathur, J.

8. I agree in the order proposed.

9. The appeal is dismissed with costs.


Save Judgments// Add Notes // Store Search Result sets // Organizer Client Files //