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Mahtab Singh Vs. the Collector of Saharanpur - Court Judgment

LegalCrystal Citation
SubjectProperty
CourtAllahabad
Decided On
Reported inAIR1932All454
AppellantMahtab Singh
RespondentThe Collector of Saharanpur
Excerpt:
- - on the failure of raja balwant singh to execute the sale deed in pursuance of the decree passed in the suit for specific performance the court had the sale deed executed and completed on 22nd november 1922. normal delivery of possession was given on 23rd january 1923. this however did not imply dispossession of anyone, as according to the agreement of sale the lessee was to continue in possession for six years. we are satisfied that the plaintiff-respondent is entitled to the sum of rs. the only question was whether bishunchand and daya shankar, to whom raja balwant singh sold the property in disregard of the agreement previously entered into, had acquired a good title. 19,352, it is complained that it amounts to compound interest. this grievance may be well founded......1921, under a mortgage deed in favour of kunwar sen and bansidhar. on 26th july 1921, raja balwant singh agreed to sell village nejabatpur to the appellant mahtab singh for a sum of rs. 73,725. similarly he agreed on the same date to sell village jamaluddinpur to raghuraj singh for a sum of rs. 17,000. it was agreed that out of the consideration of rs. 73,735 payable by the appellant for village nejabatpur, a sum of rs. 58,625 would be paid to the mortgagees kunwar sen and bansidhar. the village was in possession of a lessee who had paid rent in advance and who was entitled to retain possession for six years. the rent for the six years thus received by the vendor in advance amounted to rs. 14,100, which was to be credited to the vendee and deducted from the price payable by the latter......
Judgment:

Niamatullah, J.

1. This is an appeal by the defendant Mahtab Singh, and arises out of a suit brought in the following circumstances: Raja Balwant Singh, whose estate is now under the superintendence of the Court of Wards, owned villages Nejabatpur and Jamaluddinpur which were subject to a common charge of Rs. 75,625 on 5th August 1921, under a mortgage deed in favour of Kunwar Sen and Bansidhar. On 26th July 1921, Raja Balwant Singh agreed to sell village Nejabatpur to the appellant Mahtab Singh for a sum of Rs. 73,725. Similarly he agreed on the same date to sell village Jamaluddinpur to Raghuraj Singh for a sum of Rs. 17,000. It was agreed that out of the consideration of Rs. 73,735 payable by the appellant for village Nejabatpur, a sum of Rs. 58,625 would be paid to the mortgagees Kunwar Sen and Bansidhar. The village was in possession of a lessee who had paid rent in advance and who was entitled to retain possession for six years. The rent for the six years thus received by the vendor in advance amounted to Rs. 14,100, which was to be credited to the vendee and deducted from the price payable by the latter. This was to compensate Mahtab Singh for not obtaining possession for six years during which the lessee would retain possession in terms of her lease. Rs. 1,000 was paid in cash as earnest money. These three sums make up the total of Rs. 73,725 Raghuraj Singh, who had agreed to purchase the village Jamluddinpur, was to pay the entire sum of Rs. 17,000 the agreed price of that village to the mortgagees Kunwar Sen and Bansidhar. It should be noted that the sums agreed to be left with the vendees for payment to the mortgagees were just sufficient to discharge the encumbrance in favour of Kunwar Sen and Bansidhar.

2. Raja Balwant Singh did not execute the sale deeds as agreed by him in favour of Mahtab Singh and Raghuraj Singh, on the contrary sold the two villages to BishunchanH and Dayashankar on 5th August 1921 for Rs. 1,04,000, out of which Rs. 75,625 was left with the vendee for payment to the mortgagees Kunwar Sen and Bansidhar. These vendees also agreed to accept Rs. 14,100 as compensation for loss of the usufruct in consequence of the lessee's possession for six years. They paid Rs. 5,000 as earnest money, and a sum of Rs. 9,11,75 before the Sub-Registrar at the time of the registration of the deed. Mahtab Singh brought a suit for specific performance against Balwant Singh and his vendees Bishunchand and Dayashankar in terms of the agreement of sale already referred to Raghuraj Singh did not bring any action and acquiesced in the breach of agreement to sell village Jamaluddinpur. The Court of first instance decreed the suit of Mahtab Singh on 11th May 1922, and directed execution of a sale deed by Raja Balwant Singh as agreed. On the failure of Raja Balwant Singh to execute the sale deed in pursuance of the decree passed in the suit for specific performance the Court had the sale deed executed and completed on 22nd November 1922. Normal delivery of possession was given on 23rd January 1923. This however did not imply dispossession of anyone, as according to the agreement of sale the lessee was to continue in possession for six years. The estate of Raja Balwant Singh was taken under the superintendence of the Court of Wards shortly afterwards in the same year. In the meantime Bishunchand and Dayashankar preferred an appeal to this Court from the decree passed in favour of Mahtab Singh in the suit for specific performance. Their appeal was dismissed on 27th April 1926.

3. It was not till 29th June 1926, that Mahtab Singh offered to pay Rs. 58,625 out of the consideration of the sale to the mortgagees Kunwar Sen and Bansi dhar. His deposit under Section 83, T.P. Act, was not accepted by the mortgagees in full satisfaction of the charge, existing on the two villages. They however agreed to accept the same in part satisfaction of the mortgage money due to them on the date of deposit. Mahtab Singh agreed to the deposit made by him being accepted in part satisfaction of the encumbrance. No payment seems to have been made by Bishunchand and Daya Shankar out of the consideration for sale of village Jamaluddinpur. It should be mentioned that Rs. 58 625 was believed to be due to the mortgagees in respect of the proportionate charge on village Neabatpur on 26th July 1921. By 29th June 1926, when Mahtab Singh actually deposited that sum that portion of the charge had considerably increased. On 17th November 1926, the Court of I Wards paid Rs. 52,752-29 in full satisfaction of what remained due to the mortgagees Kunwar Sen and Bansidhar in, respect of their mortgage. The major part of this amount represented the encumbrance on village Jamaluddinpur. It is not disputed that it included a sum of Rs. 19,352 which was the interest on Rs. 58,625 accruing between the date of the sale deed in favour of Mahtab (i.e., 22nd November 1922) and the date of deposit by him.

4. The Court of Wards representing the estate of Raja Balwant Singh instituted the suit which has given rise to this appeal for recovery of Rs. 19,352 aforesaid, together with interest on that sum from the date of deposit by Mahtab Singh to the date of suit. Other reliefs were also claimed, but it is not necessary to mention them for the purposes of this appeal. The lower Court decreed the plaintiff's claim for Rs. 19,352, but as regards interest on that sum the defendant has been found liable to pay at the rate of 6 per cent from 18th September 1926, when the plaintiff demanded payment of Rs. 19,352, up to the date of suit. The defendant Mahtab Singh has-appealed to this Court.

5. The plaintiff's claim for Rs. 19,352 proceeds on the ground that the defendant became liable to pay Rs. 58,625 to the mortgagees Kuawar Sen and Bansidhar on 22nd November 1922, when they obtained execution of the sale deed in pursuance of the decree passed in his suit for specific performance If such payment had been made on that date, interest would have ceased to run on that sum, and the plaintiff would not have been required to pay interest on Rs. 58,625 between 22nd November 1922, and 17th November 1926, when the plaintiff actually paid a large sum of money in full satisfaction of the mortgagees' claim; in other words, it was the direct result of the defendant's default in paying Rs. 58,625 on 22nd November 1922, that the plaintiff had to pay an extra sum of Rs. 19,352. It is contended on behalf of the defendant appellant that the plaintiff is not entitled to recover that sum,, as the vendees of village Jamaluddinpur did not pay the portion of the mortgage money charged on it and that even if the defendant had paid Rs. 58,625, village Nejabatpur in which alone he was interested could not have been freed from encumbrance both villages being subject-to a common charge.

6. The argument is that Mahtab Singh was not bound to pay till the vendor or the vendee of Jamaluddinpur was ready and willing to discharge the rest of the incumbrance on the two villages. Reliance is placed on Muhammad Siddiq Khan v. Muhammad Nasirullah Khan [1899] 21 All. 223, the facts of which were different from those before us. In that case there was an agreement between the vendor and the vendee for part of the purchase money being retained by the latter not as a deposit, but as security for the vendor paying the entire encumbrance existing on the landed property. Their Lordships held that the vendee was entitled to retain it until the vendor provided the rest of the money necessary for the purpose of discharging the entire encumbrance. An understanding to this effect was established by evidence produced by the vendee. In the case before us there was no plea taken by the defendant that according to the agreement embodied in the sale deed or otherwise arrived at between the parties, payment of Rs. 58,625 by Mahtab Singh was made conditional on the remaining encumbrance being discharged by the vendor or the other vendee.

7. The sale deed has not been produced by either party and there is no other evidence that the parties agreed to a condition precedent of the kind referred to above. In the absence of a plea of that kind and an issue the plaintiff could not meet the case set up in the argument subsequently put forward by the defendant-appellant. Under Section 55(5), T.P. Act, the buyer is bound to pay or tender, at the time and place of completing the sale, the purchase money to the seller or to such person as he directs. It follows that it was the duty of the defendant-appellant to pay Rs. 58,625 to the mortgagees Kunwar Sen and Bansidhar in terms of the agreement of sale. Not having made the payment on 22nd November 1922, the amount of Rs. 58,625 swelled to a considerably larger sum by 17th November 1926, which the Court of Wards had to pay. We are satisfied that the plaintiff-respondent is entitled to the sum of Rs. 19,352 which, as already stated, represents the accumulated interest on the sum of 58,625 between the aforesaid dates. The learned Counsel for the appellant also referred to Badri Das v. Jivan Lal [1912] 15 I.C. 854. The facts of that case are wholly different from those of the present case and in our opinion, it has no application.

8. Another contention which has been put forward on behalf of the appellant is that he was not liable to pay Rs. 58,625 before the controversy regarding the vendor's title was finally set at rest by the judgment of this Court in appeal from the decree passed in the suit for specific performance. There was no dispute about the vendor's title. The only question was whether Bishunchand and Daya Shankar, to whom Raja Balwant Singh sold the property in disregard of the agreement previously entered into, had acquired a good title. On the execution of the sale deed in his favour the appellant became liable to pay the price forthwith, and the fact that an appeal was preferred to this Court could not suspend his liability. If he had deferred the execution of the trial Court's decree pending the appeal to this Court different considerations might have applied. He insisted on the immediate execution of the sale deed and must accept his liability arising from it.

9. As regards the further sum of Rupees 1,250-14-0 allowed by the lower Court as interest on Rs. 19,352, it is complained that it amounts to compound interest. We do not think that this is so. The Court of Wards having paid Rs. 19,352 on 17th November 1926, in consequence of the default of the appellant, was entitled to recover the sum forthwith. Formal demand was made on 18th September 1926. If the defendant had complied with their demand the sum could have been suitably invested by the plaintiff. We are of opinion that the lower Court was justified in awarding reasonable interest from the date of demand as compensation for nonpayment of Rs. 19,352 as to which the defendant's liability on the date of demand has been established. It is not compound interest, but represents compensation for the plaintiff being kept out of the use of Rs. 19,352 which should have been paid, at any rate, on 18th September 1926, when the same was demanded. Reference has been made to the conduct of Raja Balwant Singh in first agreeing to sell the village Nejabatpur to the defendant and subsequently selling it to Bishunchand and Dayashankar, which led to a contentious litigation in two Courts. It is said that the defendant's claim, eventually found to be just, wag keenly contested at the instance of Raja Balwant Singh. These circumstances are relied on in defence, and at any rate in mitigation of the damages claimed by the plaintiff. This grievance may be well founded. It was open to the defendant to have joined a claim for damages with his claim for specific performance, and the circumstances above mentioned might have entitled him to substantial damages in addition to the decree for specific performance. They have however no bearing on the controversy in the present case.

10. Lastly, the plaintiff's suit is said to be barred by limitation. The suit was instituted within one year after payment by the Court of Wards on 17th November 1926. It is suggested that Articles 65 and 111 are applicable. We do not think any of these articles can apply to the suit as framed by the plaintiff-respondent. The lower Court has applied Article 116 which provides a period of six years for a suit for compensation for the breach of a contract in writing registered. If this article applies the plaintiff's suit was in time, but in our opinion the plaintiff's cause of action is not merely the breach of the contract embodied in the registered deed of sale, but the fact that he was obliged to pay what the defendant should have paid early enough to prevent further accumulation of interest.

11. It seems to us that the plaintiff could not have instituted a suit for recovery of the sums claimed by him before paying off the mortgagees Kunwar Sen and Ban-sidhar. This they did on 17th November 1926, which should be considered as the date of their cause of action. We have examined the terms of numerous articles which were referred to in the course of argument, and do not think that any of them applies in terms to the present case. Article 120 is therefore the only article which should be held to be applicable. In that view limitation is to be reckoned from the date of payment by the plaintiff, and the suit having been brought within one year of that date is not barred. We have discussed all the questions raised at the hearing of the appeal, and find ourselves in agreement with the lower court. This appeal is accordingly dismissed with costs.


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