R.N. Gurtu, J.
1. The sale-deed in this case was executed by Ram Swarup, one of the defendants appellants before us, on his own behalf and on behalf of his brother, Joti Prasad, the second appellant before us transferring certain property to Futtu, who is the plaintiff-respondent in this appeal.
2. The vendee was put in possession of the property. The sale-consideration paid by the vendee was Rs. 500/-. In the sale-deed, there was a covenant to the following effect :
'Aur makan mubayya par mushtari ka qabza kara diya. Agra juz ya kul qabza mushtari se nikal jawe to mushtari ko ikhtiyar hoga ki zare summon mae sood wapas wasool kar le'.
Two sons of Ram Swarup appellant, namely, Daya Prakash and Anand Prakash, filed a suit No. 1178 of 1944 claiming that the property transferred was a joint Hindu family property and was not liable to be transferred for want of legal necessity. To that suit, they impleaded Futtu, the vendee and also their uncle, Joti Prasad as also their father. Ram Swarup, the two vendors. The last named two persons i.e. the vendors, did not contest the suit at all and did not file any written statement.
The suit was ultimately compromised between Futtu and the plaintiffs of that suit; the compromise being that if Futtu paid Rs. 1,100/- to the plaintiffs of that suit within a period of six months, then the plaintiff's suit would stand dismissed and Futtu's possession over the vended property would remain undisturbed,
3. It appears that the sum of Rs. 1,100/- was not paid within the stipulated time but in execution proceedings there was a further compromise wherein the sum of Rs. 1,100/- was raised to Rs. 1,900/- which was paid and Futtu remained in possession of the vended property.
4. Then Futtu filed the present suit claiming damages for breach of the warranty of title.
5. The suit was defended. The learned Additional Munsif dismissed the suit holding that the plaintiff had no cause of action against the defendants.
6. Upon appeal before the learned Additional Civil Judge, the appellate court has allowed the appeal and decreed the plaintiff's suit for Rs. 520/-i.e. the amount of damages which were claimed. The view of the court below was that there had been a breach of the warranty and that the plaintiff had suffered more damages than Rs. 520/-which was claimed. In the result, as indicated earlier the plaintiffs' suit was decreed for a sum of Rs. 520/-.
7. Before the said court below, a contention was raised that the plaintiff was only entitled to a relief in terms of the covenant which we have quoted hereinbefore and that inasmuch as there was no loss of possession, there was no right to recover damages from the vendors. The court below repelled this contention and held that the plaintiff was entitled to recover the same under the general law of property.
It held that the plaintiff could avail of the benefits of Section 55(2) of the Transfer of Property Act which indicates that the seller shall be deemed to contract with the buyer that the interest which the seller professes to transfer to the buyer subsists and that be has power to transfer the same. The court below rejected the contention that by entering into the specific covenant, which has been quoted hereinbefore, the parties have contracted themselves out of Section 55(2) of the Transfer of Property Act.
The view of the court below was that unless there had been a contracting out of Section 55(2). Transfer of Property Act, in case of a breach of warranty, damages could always be claimed by the vendee and that any special covenant entered into between the vendor and the vendee did not deprive him of the right to claim damages on a breach of statutory warranty. The said court has found that it was proved in the suit, upon the evidence tendered, that Ram Swarup had two other sons and that the representation made in the sale deed that the property was the sole property of Ram Swarup and his brother, Joti Prasad, was not correct. The court below had also held that the question of a breach of warranty already stood decided by the decree. Exhibit 2 on this record, passed in suit No. 1178 of 1944.
8. The appellants, Ram Swarup and Joti Prasad, in this appeal have re-urged the point taken in the court below. The contention of learned counsel is that inasmuch as there was an express covenant wherein it was stipulated that in case of possession being either wholly or partially lost over the property, the sale consideration with interest would be recoverable, therefore, the warranty which is implied in Section 55(2) of the Transfer of Property Act must be deemed to have been given up by the vendee under the contract.
In our view, the court below was clearly right in holding that the specific covenant aforesaid did not destroy the statutory warranty given under Section 55(2) aforesaid. The covenant entered into between the parties dealt with only one specific case and that was that if qua the vended property possession was disturbed then in such a case, the vendee was given a right to recover the sale consideration with interest.
It did not deal with cases uncovered by that covenant and the general right given by Section 55(2) of the Transfer of Property Act, in our view, remained intact. There is nothing in the contract to show that that right has been specifically contracted out and we are in agreement with the view of the court below that, the general right under the Transfer of Property Act still remains intact, particularly because the covenant between the parties is, in no way, inconsistent with Section 55(2) of the Transfer of Property Act.
9. The next contention raised by learned counsel was that the court below had wrongly considered that the question of warranty of title had already been decided inter partes by the decree passed in suit No. 1178 of 1944. It is correct that the court below seems to think that the matter relative to warranty of title was concluded by the decree passed in that suit, which is Exhibit 2 on the record of this case.
We are of the view that that decree did not operate as res judicata at all because in that suit the vendors and the vendee were both arrayed as defendants and the determination of rights inter se was not necessary for the purpose of disposal of the suit, nor was there any such determination either directly or even by implication. The vendors did not even put in appearance and the suit proceeded ex parte against them and the plaintiff's suit as against the vendee was disposed of in terms of a compromise entered into between them.
Therefore, clearly the judgment and decree in that suit cannot operate as res judicata between the present plaintiff and the present defendants, namely, the vendors and the vendee but it is undoubtedly evidence of the fact that there was a suit brought by the sons as against the vendors and the vendee and it is also evidence of the fact that a compromise entered into under which the vendee was required to pay a certain sum of money to the plaintiffs in order that the plaintiffs' suit should stand dismissed and in order that be might retain the property.
These facts are established by the judgment but the judgment or decree in that suit does not operate as res judicata. Fortunately, in this case the plaintiff went into the witness-box and the defendants have also gone into the witness-box and the court below has recorded an independent finding based On the oral evidence tendered. That court has pointed out that lack of full ownership is apparent from the deposition of Ram Swamp, one of the defendants, wherein he says that he had told the vendee that he had got three other sons alive and that the vendors were not the sole owners of the disputed property.
It is evident from a perusal of the evidence tendered that this conclusion of the court below is correct. The defendants in the suit have nowhere denied, that the sons also had a share in the property. As a matter of fact, they wanted to suggest that the plaintiff had full knowledge of there being three sons. But the assertion in the deed is quite different. There is no duty cast on the vendee to make enquiries and he may accept the representation made to him by the vendors in regard to the latters' title.
In the circumstances, the court below was right in finding that there had been a misrepresentation in regard to title and that the warranty had been broken. In the circumstances, damages clearly became payable.
10. Learned counsel has then contended that the damages awarded were excessive, that the vendors did not put in appearance in the previous suit and, therefore, the settlement made between the vendee-defendant on the one side and the plaintiffs of that suit on the other could not be said to be a settlement which would necessarily be binding on the vendors and he urged that it was open to the vendors to show that the vendee had paid an excessive sum of money in order to retain possession of the property.
11. He then said that no notice had been given to the present defendants the vendors before the vendee entered into a settlement with the plaintiffs and they were entitled to question the agreed sum. In our view, the fact that no notice had been given would certainly entitle the defendants to say that the question of quantum of damages could not be deemed to have been finally disposed of.
12. Even though it was open to further consideration in this suit as to what damages should foe awarded, it seems to us in the circumstances that inasmuch as the court below has only decreed the suit for Rs. 520/- as against Rs. 1,100/- which the vendee had agreed to pay to the plaintiffs of the previous suit it cannot be said that the damages have not been properly assessed by the court below.
13. It was next contended that inasmuch as the property had been sold, in the first instance, for Rs, 500/- only, the sons' share would be only one-half of Rs. 520/- and damages should not exceed Rs. 260/-. We do not think that this is the correct way of looking at the matter. The correct way of looking at the matter would be to see as to what sum the vendee would be justified in paying to persons who had a title and who could dispossess the vendee at least qua their shares. We consider that in view of the fact that the vendee had already incurred additional expenses in improving the property, he must have been at a disadvantage in bargaining and, in the circumstances, he probably could not make a better bargain. In the circumstances, the sum of Rs. 520/- does not appear to be an excessive amount.
14. It is to be noted that the vendors were parties to the earlier suit and they kept out of the proceedings and allowed the suit to be disposed of ex parte. They could have spoken in support of the title they had asserted in their deed and if they had done so, there might not have been a necessity to enter into a compromise or the compromise would have been effected at a mere nominal sum. We consider that the action of the vendee in compromising the earlier suit and at the figure cannot be seriously questioned in these proceedings.
15. In Narayan Kisan v. Bhaurao Sakharam, AIR 1956 Nag 124, where the vendor, who was impleaded as a defendant to the suit impeaching his title and claiming the vendee's eviction remained ex parte though the question of title was a matter within his special knowledge, and therefore the vendee compromised the suit and subsequently filed a suit for damages against the vendor for a breach of the covenant, it was held that the vendor was liable for damages and he could not have imputed bad faith to the vendee for compromising the suit.
Nor do we think that it can be seriously contended in this case that the vendee who had, as already indicated, spent money in improving the property could have allowed it to go out of his possession and then claimed re-imbursement of the sale consideration together with interest. Where titles are challenged, when the warranty is defective, vendees have often compromised with the person challenging the title and they have been held entitled to claim damages from their vendors,
16. We may refer to one of such cases which is reported in Durga Kuar v. Kalicharan, 11 All LJ 184. In that case, it was indicated that if a demand about certain property was made which a person indemnifying is bound to pay and notice is given to him of the demand on which he takes no action and the person to be indemnified compromises the dispute before the suit is brought, the indemnifying party is not entitled to come forward and say that it was not a fair and reasonable one.
17. No doubt in this case no notice, as such, was given but the defendants were parties to the suit and it was their duty, having given a warranty, to come forward and defend the suit rather than to allow the suit to proceed ex parte and even if we do not hold that the conduct of the defendants was suspiciously collusive, in our view the fact that they had been made defendants was enough to give them notice that the suit might be compromised. In fact, they probably knew the exact position. The plaintiffs were their relations, being the sons of Ram Swamp who was one of the defendants, and they probably knew that the vendee had already spent a sum of money on improvements. We do not think that a direct notice is always required. Moreover, Durga Kuar's case, 11 All LJ 184, was a case where the compromise had been entered into even before the suit.
18. Having considered the entire matter, we have come to the conclusion that the judgment of the court below appealed against is correct. In the circumstances, we dismiss this appeal with costs.