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Bawa Sunder Singh Vs. Hans Raj Sial and anr. - Court Judgment

LegalCrystal Citation
SubjectProperty
CourtPunjab and Haryana High Court
Decided On
Case NumberFirst Appeal No. 18 of 1951
Judge
Reported inAIR1953P& H231
ActsTransfer of Property Act, 1882 - Sections 55 and 55(1); Evidence Act, 1872 - Sections 114
AppellantBawa Sunder Singh
RespondentHans Raj Sial and anr.
Appellant Advocate I.D. Dua and; Manmohan Singh Gujral, Advs.
Respondent Advocate Bhagirath Das and; D.N. Avasthy, Advs.
DispositionAppeal allowed
Cases ReferredNisamuddin v. Mamtazuddin
Excerpt:
.....that the plaintiff knew full well, that the seller had full right to sell what he agreed to sell. hans raj sial would be satisfied regarding the soundness of the proprietary title of the property of bawa sunder singh. ' 29. the learned judge found that time was the essence of the contract, that title of the defendant was not defective and this allegation by the plaintiff was an afterthought, that tooth under the law as well as under the terms of the contract the defendant was bound to satisfy the plaintiff as to his title and 'when the plaintiff had demanded these documents to to be shown to him at amritsar, the defendant should have done so,'and as there was failure on the part of the vendor to produce the title deeds the defendant had failed to carry out the terms of the contract and..........proportionate costs.25. on 24-1-1947, bawa sunder singh defendant agreed to sell to mr. hans raj sial property situate on beadon road, lahore, for a sum of rs. 8,20,000/-.the relevant conditions of the sale were :(1) that the above property has been sold to mr. hans raj sial for rs. 8,20,000/- through s. brahm singh bhalla, partap singh property brokers, lahore. () that mr. hans raj sial will have to pay another sum of rs. 30,0007- (rupees thirty thousand) as balance amount of earnest money within 15 days from today. (3) that mr. hans raj sial will have the necessary registration done and completed after paying bawa sunder singh the balance amount within four months from today. (4) that in case mr. hans raj sial fails to pay rs. 30,000/- as further earnest money or the balance of the.....
Judgment:

Harnam Singh, J.

1. On the 24-1-1947 Bawa Sunder Singh, hereinafter referred to as the seller, agreed to sell to Mr. Hans Raj Sial, hereinafter referred to as the buyer, the property described in the agreement, Ext, p, 1, for rupees 8,20,000/-. In the agreement, Ext. P. I, it was stated that the seller had received from the buyer Rs. 50,000/-as earnest money and that further sum of Rs. 30,000/- was to be paid to the seller by the buyer on account of earnest money within 15 days.

2. Receipt, Ext. P. 3, shows that the seller was paid Rs. 30,000/- on account of the balance of the earnest money on 7-2-1947.

3. In Clause 3 of the agreement Ext. P. 1, it was provided that the buyer was to pay the purchase price within four months beginning with 24-1-1947.

4. Clause 8 of the agreement, Ext. p. 1, which is material for the purposes of this appeal reads :

'8. That Bawa Sunder Singh has assured Mr. Hans Raj Sial that he has an unrestricted and complete right as full owner to dispose of the property above described and that the same is free from all defects of title and from every sort of encumbrance and that before the actual registration of the sale deed Mr. Hans Raj Sial would be satisfied regarding the soundness of the proprietary title of the property of Bawa Sunder Singh.'

On 16-5-1947, the buyer wrote letter, Exhibit P. 5, to the seller. By that letter the buyer informed the seller that he had authorised Messrs. Sohan Lal 'Vohra' and Data Ram 'Kapur', Advocates, to examine documents of title relating to the property agreed to be sold by agreement Exhibit P. 1.

By that letter the buyer requested the seller to produce to the buyer documents of title relating to the property at Amritsar, Katra Ahluwalia between 5 p. m. and 7 p. m. on 19th, 20th and 21st days of May, 1947, for examination by Messrs. Sohan Lal Vohra and Data Ram Kapur.

5. On 19-5-1947, the seller wrote letter, Ext. P. 9, to the buyer. In that letter, the seller informed the buyer that he was prepared to produce to the buyer for examination documents of title relating to the property agreed to be sold at his office 11, Dinga Singh Building, the Mall Lahore, on any day. Further correspondence went on between the parties. In this connection letters, Exts P. 5, P. 8, and P. 9, may be seen. Suffice it to say that the seller did not produce to the buyer for examination documents of title relating to the property at the office of Mr. Data Ram Kapur at Amritsar, and the buyer did not go to Lahore for the examination of the documents of title with the result that the contract of sale was not completed.

6. On 2-11-1949, counsel for the buyer called upon the seller to pay his client the sum of rupees 80,000/- paid on account of earnest money together with interest at 6 per cent, per annum from 24th of January, 1947, till payment and rupees 200,000/- by way of damages for breach of contract.

7. On 21-1-1950, the buyer instituted civil suit No, 35 of 1950 for the recovery of rupees 105000/-as' per following details :

(1) Rupees 80,000/- paid to the seller as earnest money.

(2) Rupees 14,400/- interest on rupees 80,000/-at 6 per cent per annum.

(3) Rupees 8,200/- paid to the brokers by the buyer.

(4) Rupees 2,400/- nominal damages for breach of contract.

8. Defendant resisted the suit pleading 'inter alia' that he did not commit the breach of contract.

9. On the pleadings of the parties the Court of first instance fixed the following Issues:

1. Was the defendant responsible for breach of the terms of the agreement of sale in dispute and what was its effect on the plaintiff's claim?

2. Was the plaintiff legally entitled to the return of the amount of earnest money paid by him, even in default of proof of issue No. 1?

3. To what amount was the plaintiff entitled?

10. In deciding civil suit No. 35 of 1950 the Court has found the seller to be guilty of the breach of Clause 8 of the agreement, Exhibit P, 1. Finding that the seller has committed breach of Clause 8 of the agreement the Court has decreed civil suit No. 35 of 1950 for rupees 80,000/- with proportionate costs. Items Nos. 2, 3 and 4 of the claim have not been allowed.

11. From the decree passed in civil suit No. 35 of 1950 the seller appeals.

12. In arguments it is said that the seller was not bound to produce to the buyer on his request for examination documents of title relating to the property agreed to be sold at Amritsar.

13. Section 55(1)(b), Transfer of Property Act, 1882, hereinafter referred to as the Act, provides inter alia :

'In the absence of a contract to the contrary, the seller is bound to produce to the buyer on his request for examination all documents of title relating to the property which are in seller's possession or power.'

Section 55(1)(b) of the Act is silent as to the place of production of the documents of title. Ifso, the law by which this question must be judged is that described by Section 6, Punjab Laws Act, 1872. Section 6 of that Act reads : 'In cases not otherwise specially provided for the Judges shall decide according to Justice equity 'and good conscience.'

14. In -- 'Waghela Rajsanjl v. Shekh Maslu-din', 14 Ind App 89 (PC) (A), Lord Hobhouse delivering the judgment of their Lordships of the Privy Council said:

'The expression 'equity and good conscience' was generally interpreted as meaning English Law, if found applicable to Indian society and circumstances.'

15. In England, the law as to the place of production of the documents of title in case of sale is thus stated in Dart on Vendors and Purchasers, Volume I, page 415:

'The vendor may produce the deeds either athis own known residence, or upon or in the immediate vicinity of the estate, or in London.'

16. In Halsbury's Laws of England, 2nd Edition, Vol. 29, the rule is stated to be in these words at page 318 :

'Where the documents are in the vendor's possession and are produced at the proper place for inspection, that is to say, either at the vendor's solicitor's office or near the land sold or in London, the purchaser must pay the cost of inspecting them by his own solicitor; but if they are produced elsewhere the vendor must defer any extra cost occasioned thereby.'

17. In these proceedings, it is not disputed that the rule in England as to the production of documents of title by the seller is as stated at page 415 of Dart on Vendors and Purchasers, Volume I. That being so, the question that arises for decision is whether the rule of English Law is applicable to Indian society and circumstances.

18. Now, the basis of the rule is that every vendor is presumed to have his title deeds In his own possession. Section 55(3) of the Act provides that when the whole of the purchase money has been paid to the seller he Is bound to produce to the buyer documents of title relating to the property which are in his possession or power. Clearly, documents of title relating to the property-agreed to be sold are to remain in possession of the seller till the purchase money is paid. That is the law in England as also in India. Indeed, counsel for the buyer has not cited any law by which the seller is bound to produce to the buyer documents of title at the residence of the buyer, and I do not see that it should be so in India.

19. For the foregoing reasons, I find that the Court of first instance was wrong in thinking that the seller was bound to produce to the buyer documents of title at the office of Mr. Data Ram Kapur at Amritsar.

20. On 24-1-1947, agreement, Ext. P. 1, was made which provided 'inter alia' that the contract of sale was to be completed on or before 23-5-1947. On 2-5-1947, Lord Ismay left Delhi for England with the Mountbatten Plan for the division of the country. Before that date, no request was made by the buyer to the seller for the examination of deeds of title relating to the property. For the first time on 16-5-1947, the buyer wrote to the seller letter, Exhibit, P. 5, requesting him to produce documents of title at Amrtisar for the examination of Messrs. Sohan Lal Vohra and Data Ram Kapur. In para. No. 8 of the written statement it was said that the plaintiff knew full well, that the seller had full right to sell what he agreed to sell. In Court the seller produced copy of the deed of partition dated 27-5-1946, show-Ing that he had full right to sell the property. Indeed, there is not a syallable of evidence on the record to show that there was any defect in the title of the seller. On these facts, I think that the buyer must be taken to have accepted the title of the seller before he wrote letter, Exhibit P. 5. For authority on this point -- 'Pegg v. Wisden', (1852) 16 Beav 239 (B), may be seen. In that case purchaser's solicitor, after retaining the abstract for five months without raising any objection or making any enquiries as to the title of the vendor applied to the vendor's solicitor to ascertain where the deeds must be examined. On those facts Sir John Romilly, M. R. said:

'I think the plaintiff must be taken as having accepted the title. As to possession the case is different where a party takes possession and where he is already in possession; but considering the time which has elapsed subsequent to the delivery of the abstract, that no objection has ever been raised or enquiries made as to the title, and that all that the plaintiff has required has been to verify the abstract, I think it must be taken that there has been an acceptance of title.'

21. No other point arises in the case.

22. For the reasons given above, I would allow Regular First Appeal No. 18 of 1951 dismissing civil suit No. 35 of 1950 with costs throughout.

23. KAPUR J.: I agree, and as the matter is of some importance I think it necessary to give my reasons.

24. This Is a defendant's appeal against a judgment and decree of Mr. Ishwar Das Puri, Senior Subordinate Judge, Amritsar, dated 16-1-1951, awarding to the plaintiff a decree for Rs. 80,000/- with proportionate costs.

25. On 24-1-1947, Bawa Sunder Singh defendant agreed to sell to Mr. Hans Raj Sial property situate on Beadon Road, Lahore, for a sum of Rs. 8,20,000/-.

The relevant conditions of the sale were :

(1) That the above property has been sold to Mr. Hans Raj Sial for Rs. 8,20,000/- through S. Brahm Singh Bhalla, Partap Singh Property Brokers, Lahore.

() That Mr. Hans Raj Sial will have to pay another sum of Rs. 30,0007- (rupees thirty thousand) as balance amount of earnest money within 15 days from today.

(3) That Mr. Hans Raj Sial will have the necessary registration done and completed after paying Bawa Sunder Singh the balance amount within four months from today.

(4) That in case Mr. Hans Raj Sial fails to pay Rs. 30,000/- as further earnest money or the balance of the purchase money within the time fixed in Clauses 2 and 3 above respectively the bargain shall be considered as cancelled and the earnest money will stand confiscated & forfeited in favour of Bava Sunder Singh.

(7) That Mr. Hans Raj Sial can have the deeds executed and registration done in the names of his nominees if he so desires.

(8) That Bawa Sunder Singh has assured Mr. Hans Ra] Sial that he has an unrestricted and complete right as full owner to dispose of the property above described and that the same is free from all defects of title and from every sort of encumbrance and that before the actual registration of the sale deed, Mr. Hans Raj Sial would be satisfied regarding the soundness of the proprietary title of the property of Bawa Sunder Singh.

(9) If, however, Bawa Sunder Singh, against full payment of rupees eight lakhs twenty thousand within time does not execute and appear for registration in the Court a sale deed in favour of Mr. Hans Ra] Sial the latter will have the right to get this agreement compulsorily registered as a sale deed and to get specific performance of this contract through law. The parties in witness whereof signed this agreement in the presence of the following persons this 24th day of January 1947, at Amritsar.'

26. Rs. 50,0007- as earnest money was paid on 24-1-1947, and Rs. 30,000/- the balance of the earnest money was paid on 7-2-1947. The sale deed was to be executed and registered in four months' time.

27. On 16-5-1947, Mr. Hans Raj Sial sent a registered letter to Bawa Sunder Singh, Exhibit P. 5, printed on page 38 of the paper-book, in which it is stated that he (Mr. Hans Raj Sial) had authorised Messrs. Sohan Lal Vohra and Data Ram Kapur Advocates to inspect the documents of title which related to the property covered by the agreement of 24-1-1947, that Messrs. Sohan Lal and Data Ram would be available in their office for the purpose of inspection of documents in Katra Ahluwalia, Amritsar, between 5 p.m. and 7 p.m. from 19th to the 21st of May 1947, and that on this being done he will send the cost of stamp paper and the draft of the sale deed. It was also stated in this letter that Lachhman Dass was the nominee for purposes of the sale as Mr. Hans Raj Sial had agreed to sell the property to him. It appears that a telegram was also sent by Mr. Hans Raj Sial to Bawa Sunder Singh, the contents of which were the same as that of the letter Si a reply was sent by Bawa Sunder Singh by a telegram in which it was stated that he was prepared to give inspection at his office, 11 Dinga Singh building, Lahore, on any day that was convenient to Mr. Hans Raj Sial and the buyer was also reminded that the time for registration would expire on 23rd May. In the letter dated 19-5-1947, which was sent by Bawa Sunder Singh to Mr. Hans Raj Sial Ext. P-9, at page 40 of the paper-book, both the telegrams received by Bawa sunder Singh and the telegram sent by him are referred to. Another letter of Bawa Sunder Singh, dated 22-5-1947, Ext. P. 8, printed at page 39 of the paper-book, refers to a telegram received from Mr. Hans Raj Sial in which the latter said that Bawa Sunder Singh. was deliberately 'shirking' to give Inspection of the title deeds so that the time limit may pass and that it was his duty to 'send papers without delay to Advocates already notified or satisfy them about marketable title.'

It was also stated that this was a default on his part and asked him 'to do the needful' before the date of the completion expired. The letter also reproduced the telegram which Bawa Sunder Singh had tried to send in reply in which he denied that he was shirking giving inspection of title deeds or that there was any sinister anxiety to let the time pass. On the contrary, he was prepared to give inspection of the title deeds at Lahore before the expiry of the period of time. The letter ends by saying that this was the telegram that he wanted to send but as the telegrams were not being accepted, the letter was being sent by express delivery and a copy of it by registered post. This was the position between the parties and on the 2nd of November, 1949, a registered notice was sent on behalf of Mr. Hans Raj Sial calling upon Bawa Sunder Singh to pay Rs. 80,000/- with interest at the rate of 6 per cent, per annum and Rs. 2,00,000/- (two lacs) as damages.

28. On 21-1-1950, Mr. Hans Raj Sial brought a suit for the recovery of Rs. 1,05,000/-, being the amount paid as earnest money plus interest plus brokerage plus damages, alleging that the breach was on the part of the defendant in so far as he did not satisfy the plaintiff in regard to his title and he delayed the performance of contract to such an extent that it became impossible of performance. It was also alleged that the title of the defendant was defective, he was not the full owner of the property agreed to be sold and had no right to sell the same free from encumbrances and from defects and as full owner and that the property was joint Hindu family property. The defendant denied these allegations and stated that he had never refused to allow the plaintiff inspection of title deeds and pleaded that he was always willing to give inspection at Lahore. He also pleaded that the breach was on the part of the plaintiff and he was not therefore entitled to recover Rs. 80,000/-or any interest or brokerage or damages. The following three issues were raised in the case:

'1. Was the defendant responsible for breach of the terms of the agreement of sale in dispute and what was its effect on the plaintiff's claim?

2. Was the plaintiff legally entitled to the return of the amount of the earnest money paid by him even in default of proof of issue No. 1?

3. To what amount was the plaintiff entitled?'

29. The learned Judge found that time was the essence of the contract, that title of the defendant was not defective and this allegation by the plaintiff was an afterthought, that tooth under the law as well as under the terms of the contract the defendant was bound to satisfy the plaintiff as to his title and 'when the plaintiff had demanded these documents to to be shown to him at Amritsar, the defendant should have done so,' and as there was failure on the part of the vendor to produce the title deeds the defendant had failed to carry out the terms of the contract and the purchaser was entitled to the refund of earnest money. Reliance was placed by the learned Judge on a judgment of the Peshawar Judicial Commissioner's Court in --'Bishan Das v. Haji Pazal Ilahi', AIR 1937 Pesh 8 (C). He also found that the plaintiff was not entitled to any interest or damages because 'he had kept quite silent till nth May, 1947. He had never offered to pay the balance of the sale price to the defendant and thus was responsible for breach of some clauses of this sale agreement himself.' The defendant has come up in appeal to this Court.

30. The controversy between the parties before us has been confined to the question as to who was responsible for the breach of the contract; in other words, whether the defendant was guilty of refusing to make out a clear title and in order to satisfy the plaintiff was bound to produce the documents at the place indicated by the plaintiff. According to paragraph 8 of the agreement Bawa Sunder Singh, the defendant, agreed that 'before the actual registration of the sale deed Mr. Hans Raj Sial would be satisfied regarding the soundness of the proprietary title of the property of Bawa Sunder Singh.' The language is inartistic, taut what it means is that the purchaser will be entitled to satisfy himself regarding the title of the vendor. In this paragraph of the contract, it is not mentioned as to where the vendor will produce the documents. ' We have therefore to see what the law on the subject is.

According to Section 55 of the Transfer of Property Act :

'In the absence of a contract to the contrary. The seller is bound * * * to produce to the buyer on his request for examination of documents of title relating to the property which are in the seller's possession or power.'

This section docs not indicate where the examination of documents of title is to be done. All it, says is that the seller is bound to produce the documents for the examination of the buyer. In the absence of any clear indication in the language of the section, we are entitled to apply rules of English law, which are not inconsistent with the Act, as rules of justice, equity and good conscience. In '14 Ind App 89 (P C) (A)', Lord Hobhouse said at page 96:

'In point of fact, the matter must be decided by equity and good conscience, generally interpreted to mean the rules of English law * * * '

31. In -- Mohommed Raza v. Mst. Abbas Bandi Bibi', AIR 1932 PC 158 (D), Sir George Lowndes referred to the observation of Lord Hobhouse in -- 'Waghela Rajsanji v. Shekh Masludin', (A) and said at page 181:

'It was said by Lord Hobhouse in -- 'Weghela Rajsanji v. Shekh Masludin', at p. 96 (of 14 Ind App 89) (PC) (A) that the expression 'equity and good conscience' was generally interpreted as meaning English law if found applicable to Indian society and circumstances.'

32. In -- 'Maharaja of Jeypore v. Rukminl Pattanmahdevi', AIR 1919 PC 1 (E) Lord Philll-more at page 4 applied the rules of English law in regard to forfeiture of tenancy In that case. His Lordship said :

'They are directed by the several charters to proceed where the law is silent, in accordance with justice, equity, and good conscience, and -the rules of English law as to forfeiture of tenancy may be held and have been held to be consonant with these principles and to be applicable to India; see -- 'Nisamuddin v. Mamtazuddin', 28 Cal 135 (F).'

33. This rule of English law was applied to a case of landlord and tenant in Calcutta by Ameer Ali and Brett, JJ., in '28 Cal 135 at p. 138 (F)'.

34. It has been held that the Transfer of Property Act is not exhaustive and does not profess to be a complete code and therefore equitable principles would regulate the rights and liabilities of the parties in a case which is not specifically provided for in the Act: see --'Kalyan Das v Jan Bibi', AIR 1939 All 12 at p. 14 (G).

35. The Bombay High Court in -- 'Mayashan-kar v. Burjorji', AIR 1926 Bom 31 (H), applied the principles of equity in similar circumstances.

36. As a matter of fact, the Transfer of Property Act is not applicable to the State of the Punjab and its provisions are applied as rules of justice, equity and good conscience. Even under the Punjab Laws Act, rules of justice, equity and good conscience were made applicable to cases which were not covered by that Act and as I have said above the rules of English law have been interpreted to be rules of Justice, equity and good conscience and applied to cases such as these.

37. The English law on the subject is given by Mulla's Transfer of Property Act, at page 313 where it is stated:

'The sub-section is silent as to the place of production. This would be as in England at the seller's residence or at or near the property sold or in London. If the buyer wished them to be produced elsewhere the extra cost occasioned thereby would be borne by him.'

38. In Dart on Vendors and Purcliasers, Volume I, at page 415, the law in England is stated in the following words:

'The vendor may produce she deeds either at his own known residence, or upon or in the immediate vicinity of the estate, or in London; and the purchaser in such cases pays for the necessary journeys of his own solicitor.'

39. In the second coition of Halsbury's Laws of England (Hailsham Edition) Volume 29, at page 318, the rule is stated as follows :

'Where the documents are in the vendor's possession and are produced at the proper place for inspection, that is to say, either at the vendor's solicitor's office or near the land sold or in London, the purchaser must pay the cost of inspecting them by his own solicitor.'

40. No case has been quoted or principle stated which would show that it is the duty of the vendor to produce the documents at any place other than that which is prescribed by English law. The respondent's counsel sought to Interpret the words of Section 55(1)(b), Transfer of Property Act, to mean that the documents were to be produced where the buyer wanted them and reliance was placed on the words 'to produce to the buyer' which according to the submission of the counsel meant wherever the buyer wanted it. I am unable to agree with this submission. As the words sought to be introduced into the section are not there, we must interpret the section in accordance with English law. I am therefore of the opinion that it was not the duty of the seller to produce the document in this ease at the office of the two Advocates mentioned in the letter of the plaintiff, dated 16-5-1947, Exhibit P. 5.

41. The learned Senior Subordinate Judge has referred to 'AIR 1937 Pesh 8 (C)' but that judgment is of no assistance in resolving the controversy which was raised in this case as the question as to where the documents have to be produced by the vendor neither seems to have arisen nor was decided by the learned Judicial Commissioner.

42. An argument was then raised by the appellant's counsel that from the wording of paragraph 8 of the contract there was a clear indication that the place where the documents were to be shown or inspection given was the vendor's office or Lahore and this is because, the words used are 'before the actual registration of the sale deed.' I am unable to hold that the words relied upon are so clearly indicative of any such intention.

43. Counsel for the appellant then submitted that the plaintiff was unwilling to perform his part of the contract because of the disturbances in Lahore End because of the uncertainty which had arisen due to danger of partition of the country, it is not necessary to give any opinion on this point because this question was not raised in the Court below and is not directly relevant to the point which was decided against the appellant.

44. I would therefore allow this appeal, setaside the judgment and decree of the trialCourt and dismiss the plaintiff's suit with coststhroughout.


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