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Shankerlal and anr. Vs. Jethmal and anr. - Court Judgment

LegalCrystal Citation
SubjectProperty
CourtRajasthan High Court
Decided On
Case NumberSecond Appeal No. 5 of 1955
Judge
Reported inAIR1961Raj196
ActsTransfer of Property Act, 1882 - Sections 55, 55(2); Specific Relief Act, 1877 - Sections 25; Code of Civil Procedure (CPC) , 1908 - Sections 11 - Order 1, Rules 9 and 10
AppellantShankerlal and anr.
RespondentJethmal and anr.
Appellant Advocate M.M. Singhvi, Adv.
Respondent Advocate Krishna Murari, Adv.
DispositionAppeal allowed
Cases ReferredLyddal v. Weston
Excerpt:
- - but the defendants had failed to resolve their dispute with bherunlal and had further failed to complete the sale. a-1) on the defendants to the effect that they were ready and willing to perform their part of the agreement but that the defendants had failed to execute the sale-deed, and, therefore, the plaintiffs called upon the defendants to return the earnest money of rs. a-3) on the 29th april, 1953, in which they completely repudiated the allegations made by the plaintiffs in their notice and pointed out that the failure of the defendants to execute and complete the sale-deed was caused by the plaintiffs' own default inasmuch as the latter had not paid their share of the stamp and registration charges as agreed and that the plaintiffs had also failed to give the draft.....i.n. modi, j.1. this appeal by the defendants shankerlal and another is directed against the judgment and decree of the district judge, bhilwara, upholding the judgment and decree of the civil judge, bhilwara, in a suit for refund of earnest money.2. the material facts are these. on the 27th march, 1953, defendants shankerlal and arjunlal agreed to sell and the plaintiffs to purchase the suit house for a sum of rs. 12,000/- vide ex. 1. the plaintiffs paid a sum of rs. 700/- as earnest money then and there and the rest of the sale consideration was agreed to be paid at the time of the registration of the sale-deed, and it was further agreed between the parties that the sale would be completed within one month of the date of the agreement.the case of the plaintiffs as disclosed in the.....
Judgment:

I.N. Modi, J.

1. This appeal by the defendants Shankerlal and another is directed against the judgment and decree of the District Judge, Bhilwara, upholding the judgment and decree of the Civil Judge, Bhilwara, in a suit for refund of earnest money.

2. The material facts are these. On the 27th March, 1953, defendants Shankerlal and Arjunlal agreed to sell and the plaintiffs to purchase the suit house for a sum of Rs. 12,000/- vide Ex. 1. The plaintiffs paid a sum of Rs. 700/- as earnest money then and there and the rest of the sale consideration was agreed to be paid at the time of the registration of the sale-deed, and it was further agreed between the parties that the sale would be completed within one month of the date of the agreement.

The case of the plaintiffs as disclosed in the plaint was that the suit land originally belonged to one Bherunlal Gelda of Udaipur, and the defendants had stated that they would settle the dispute with Bherunlal with respect to it and it was on this account that a month's time was agreed to for the completion of the sale. But the defendants had failed to resolve their dispute with Bherunlal and had further failed to complete the sale.

Consequently on the 27th April, 1953, exactly one month after the date of the aforesaid agreement, the plaintiffs, through their counsel Sri Yashwant Singh Nahar, served a notice (Ex. A-1) on the defendants to the effect that they were ready and willing to perform their part of the agreement but that the defendants had failed to execute the sale-deed, and, therefore, the plaintiffs called upon the defendants to return the earnest money of Rs. 700/- along with interest and damages in default whereof they further stated that they would have to take legal action against the defendants.

The defendants sent a reply (Ex. A-3) on the 29th April, 1953, in which they completely repudiated the allegations made by the plaintiffs in their notice and pointed out that the failure of the defendants to execute and complete the sale-deed was caused by the plaintiffs' own default inasmuch as the latter had not paid their share of the stamp and registration charges as agreed and that the plaintiffs had also failed to give the draft sale-deed, and they further called upon the plaintiffs, (stating that on their side they had always been ready and willing to complete the sale) to give their share of the expenses within two days of the receipt of their letter and also complete the sale and it was further stated that in default thereof the plaintiffs would forfeit their earnest money as well as their right to have the sale completed because the defendants were not at all at fault so far as the completion of the sale was concerned.

The plaintiffs sent a rejoinder (Ex. A-2) to the aforesaid letter on the 1st May, 1953, again through their counsel Shri Yashwant Singh Nahar, wherein it was stated that the property which was the subject-matter of the contract for sale between the parties had originally belonged to Bherunlal Gelda of Udaipur, and that the defendants had, therefore, taken the month's time in order to obtain a clear title from the said Bherunlal or to settle their dispute with him and thereafter the sale in favour of the plaintiffs, according to the agreement, was to be completed.

It was further pointed out that the defendants had failed to obtain a proper conveyance from Bherunlal, and it was on this account that the defendants had failed to execute a proper sale-deed in favour of the plaintiffs in spite of the latter being ready and willing to pay the balance of the sale consideration and not on account of any default on the part of the plaintiffs. Reference was also made in this notice to the fact that the plaintiffs had received a notice from the said Bherunlal Gelda of Udaipur that the house was his and that the defendants had no right to sell the same to anybody whatsoever.

Consequently, the plaintiffs stated that the agreement dated the 27th March, 1953, had fallen through and was of no effect, and, therefore, it was claimed that they were entitled to receive back the sum of Rs. 700/-, and the plaintiffs called upon the defendants to pay the same within two days failing which they said they would institute an action against the defendants at their risk as to costs and consequences.

Thereafter it appears that a further reply (Ex. A-4) was sent by the defendants through their advocate Sri Chainsukh Ajmera in which a history of the defendants' title with respect to the property under sale was given and it was stated that the defendants had purchased the said property from Bherunlal Gelda on Bhadwa Sudi 4 S. 1994 (corresponding to the 8th September, 1937) and that they had entered into possession thereof and had been in such possession for all the intervening period up to the date of the agreement, and further that the defendants had incurred considerable outlay in building a compound wall and a number of apartments thereon and in this way they had been in possession of the said property for the last 16 years, and that they had mentioned all these facts and shown the relevant documents including the patta to the plaintiffs, and, therefore, they had every right to transfer the same and the agreement between the parties had been arrived at with full knowledge of all those facts, and it was futile for the plaintiffs to raise any objections to the sale.

It was further stated that the defendants were still ready and willing to complete the sale and that if the plaintiffs should fail to fulfil their part of the contract within a week of the date of their letter, it would be understood that the plaintiffs had broken the agreement and the latter would, therefore, be liable for any loss caused to the defendants. It is in these circumstances that the plaintiff instituted the present suit for refund of the earnest money on the 20th May, 1953.

3. The defendants resisted the suit. Their case was that they had disclosed the entire facts relating to their title to the plaintiffs and that the agreement to sell had been entered into between the parties with full knowledge thereof on the part of the plaintiffs and that they had reasonably good title to sell the property. The defendants further contended that the responsibility for the breach of the contract lay on the shoulders of the plaintiffs and that they had committed a breach of the same without any rhyme or reason, and, consequently, their suit deserved to be dismissed.

It may also be pointed out here that the defendants stupidly denied the receipt of Rs. 700/-as earnest money in their written statement, but it was admitted at the trial and is not questioned at this date that this money had been received by the defendants. In fact the agreement Ex. 1 contains a clear mention that the defendants had received the sum of Rs. 700/- as earnest money from the plaintiffs and, therefore, the defendants' denial on this part of the case in the written statement was entirely false.

4. The trial Court found that the plaintiffs were not prepared to purchase the property as they considered the defendants' title thereto to be defective although the Court earlier came to the conclusion that the title of the defendants appeared to be complete. In this connection the Court took into consideration the document Ex. A-8 which was an agreement to sell with respect to the property in suit by Ranglal, Munim of Bherunlal Gelda in favour of the defendants and it was mentioned therein that the sale had been settled for Rs. 1600/- out of which Rs. 1500/- had already been received and the remaining Rs. 100/- would be taken after the sale-deed had been registered.

It was further observed that although no sale-deed was ever executed or registered up to date, it was satisfactorily proved by the statement of defendant Shankerlal D. W. 6 and his witnesses that the property was in possession of the defendants since Smt. 1994 or 1937 A. D. The learned trial Judge then referred to Ex. 2, notice given by Shri Rajmal, pleader for Bherunlal Gelda dated the 11th April, 1953, and addressed to the defendants in which it was stated that Bherunlal was the owner of the property in question and that Shankerlal had entered into unlawful possession of the same and that Bherunlal had heard that the plaintiffs were purchasing the said property from Shankerlal.

It was further stated therein that Shankerlal had no right or title to the property in question and that he had taken unlawful possession of it and that proceedings had already been started to evict him therefrom and Consequently the plaintiffs should beware of purchasing the said property from Shankerlal. It was also stated in this letter that this information was being given to the plaintiffs in their own interest and that if they paid any money to Shankerlal they might stand to lose it, and, therefore, they should act with proper care and caution. Impressed by this letter, the learned trial Judge held that the plaintiffs were justified in not completing the sale as they thought that the defendants' title to the property was defective. In this view of the matter, the plaintiffs' suit for refund of the earnest money was decreed,

5. The defendants then went in appeal to the learned District Judge, Bhilwara. The learned District Judge refused to go into the question whether the defendants had a marketable title based on adverse possession or otherwise with respect to the suit property as he thought that the question was a difficult one and could not be properly decided in the absence of the original owner Bherunlal as a party to this suit.

He also declined to go into the question whether the plaintiffs had been fully posted with all relevant facts and circumstances relating to the defendants' title over the property in question as he thought that it was enough to say for the pur pose of deciding the appeal before him that the defendants' title over the property was not free from doubt.

According to the learned Judge, it was the bounden duty of the defendants to convince the plaintiffs that they had acquired a marketable title over the property free from all doubt; but as the defendants' title was under a cloud, the plaintiffs were justified in refusing to purchase the property and in demanding their earnest money back. In this view of the matter, the learned Judge maintained the decision of the trial Court and dismissed the appeal. The defendants have now come up to this Court in this second appeal.

6. It is strenuously contended by learned counsel for the defendants that his clients had not committed any breach of the agreement to sell and that the breach really came from the side of the plaintiffs, and, therefore, the Courts below should have held that the earnest money stood forfeited to the defendants. In this connection strong reliance was placed on the dictum of their Lordships of the Privy Council in Chiranjit Singh v. Har Swarup, AIR 1926 PC 1 that earnest money is part of the purchase price when the transaction goes forward and it is forfeited when the transaction falls through, by reason of the fault or failure of the vendee.

It was also strenuously contended in this connection that the stand taken by the plaintiffs that it had been agreed to between the parties before the contract was entered into that the defendants would obtain a clear title or release deed from the original owner Bherunlal Gelda and that in order to enable them to do that the sale was to be completed at the end of the period of a month from the date of the agreement was entirely false, and so also the story that there was any real cloud on the defendants' title with respect to the property in question was a complete afterthought without any foundation in fact, and, therefore, it was urged that the plaintiffs' suit should have been dismissed by the Courts below.

7-9. Now so far as the question of fact is concerned, namely, whether the plaintiffs had been apprised of the real nature of the defendants' title over the property in question before the agreement Ex. 1 was entered into, I am satisfied that they had been. (In this connection his Lordship considered the two notices sent by the plaintiffs and the testimony of the plaintiff jethmal and then continued).

Having regard to all these circumstances, I have no hesitation in coming to the conclusion that the plaintiffs knew the kind of title full well which the defendants had with respect to the property under sale before Or at the time the agreement Ex. 1 came to be executed between the parties and that their grievance that the defendants had refused to execute the sale-deed although the plaintiffs were throughout the stipulated period of one month prepared to pay the money and have the sale completed and therefore the defendants were guilty of having committed a breach of the agreement to sell has no foundation in fact.

10. It is still contended on the side of the plaintiffs that even if this Court came to the above-mentioned conclusion, the plaintiffs were justified in repudiating the contract and asking for the refund of the earnest money inasmuch as they (defendants) had not made out a marketable title and that the same was not free from cloud or suspicion. This brings me to a consideration of Section 55 of the Transfer of Property Act. Section 55 deals with the rights and liabilities of a buyer and a seller in the absence of a contract to the contrary.

Clause (1) (a) of this section lays down that the seller is bound to disclose to the buyer any material defect in the property or in the seller's title thereto of which the buyer is not aware and which the buyer could not with ordinary care discover. Under Clauses (b) and (c), the seller is required to produce to the buyer on the Jatter's request all documents of title relating to the property which are in the seller's possession or power and to answer to the best of his information all relevant questions put to him by the buyer in respect to the title of the property.

I have no doubt that there was no breach of any duty on the part of the defendants so far as these clauses are concerned. The matter, however, does not seem to end there because Sub-clause (2) of Section 55 further lays down, in so far as it is material for our present purposes, that the seller Khali be deemed to contract with the buyer that the interest which the seller professes to transfer to the buyer subsists and that he has power to transfer the same.

In other words the law places the seller in the absence of a contract to the contrary under a statutory obligation to give a warranty of title to the purchaser to the effect that he possesses the interest which he professes to transfer and that he has power to transfer the same. The contention on the side of the plaintiffs is that the defendants cannot be held to have fulfilled the requirements of this clause in the circumstances of the present case. In other words, what is contended is that the seller did not possess the proprietary interest which he was professing to transfer and he had no power in law to transfer the same.

11. To this contention the reply of learned counsel for the appellants is that the plaintiffs knew and were fully informed of such title in relation to the property under sale which the defendants possessed, and that the latter had suppressed nothing. The plaintiffs lived in the place where the property was situate and so also they were aware of everything which needed to be known, and, consequently, it is urged that the plaintiffs cannot be allowed to complain of the lack of title once the agreement to sell had taken place with full notice of the particulars of title which the defendants bad with respect to the property under contract.

I have given this aspect of the case my careful consideration and have come to the conclusion that the submission of learned counsel fulfils the requirements of Clause (1) (a) or Clauses (1) (b) and (c) but would not be a complete answer to the requirement of Clause (2) of Section 55 where the seller, in the absence of a contract to the contrary, has been placed under a specific obligation as to warranty of title. If, therefore, in a given case it is established that there is a breach of this warranty, the seller must be held to be liable to the vendee even though the latter has notice of the defective title provided there is no contract to the contrary.

It would also seem to be obvious that in such a case the seller would not be entitled to ask for specific performance of the agreement to sell. There is authority for holding that clause (2) of Section 55 applies not only to a completed sale but also to an agreement to sell, and that, in any case, if section 55(2) only refers to a completed sale and does not in express language refer to an agreement to sell, the warranty of title essential in the former case must be field to be necessarily implied in a contract for sale also. See Deep Chandra v. Md. Sajjad Ali Khan, AIR 1951 All 93 (FB). I am therefore disposed to hold the opinion that Section 55(2) applies not only to conveyances but also to agreements to sell.

12. The true question for determination, therefore, boils down to this whether the defendants vendors did possess the title or interest which they professed to transfer to the plaintiffs vendee and whether they had power to transfer the same.

13. The learned District Judge felt persuaded to avoid answering this question because Bherunlal Gelda to whom the property originally belonged and admittedly so belonged was not a party to this case. The view of the learned Judge is plausible but, in my opinion, it cannot be accepted as sound. Where the rights of the parties depend upon the determination of the question whether the vendor had a marketable title or what is called a title free from reasonable doubt, the determination of that question cannot be brushed aside merely because one of the interested parties is not a party to the suit.

In any case, it is not the fault of the defendants that he is not a party to the suit. The plaintiffs had instituted the suit, and it was a matter of their choice whom to implead or not to implead as defendants to the suit. But precisely for that reason, I think that it would be hardly right that the defendants should stand to be penalised, and it seems to me that they are entitled to ask the Courts to hold, in the circumstances of a case like the present, whether they had a marketable title or not; because upon the decision of that question, the answer to the suit would properly depend.

If the defendants vendors are unable to show a title free from reasonable doubt with respect to the property under sale, the suit of the plaintiffs vendees for recovery back of the earnest money paid by them will have to be decreed. If, on the other hand, the defendants vendors do succeed in showing that they had a marketable title which they professed to sell and that they had the power to transfer the same, equally clearly they would be entitled to non-suit the plaintiffs.

It is true that the Court may experience a certain amount of difficulty in determining this question in the absence of a party who is the alleged rival claimant; but what may be said with equal or even better justice, is that the matter has nevertheless got to be decided between the parties to-the suit in order properly to adjudicate on their respective rights. It may be that such a decision would not bind the person or persons who are not parties to the suit; but what I feel is that, after all is said and done, what is required to be proved is not a title which is fool-proof or about which no dispute whatsoever Can possibly be raised, but a title which is free from a reasonable doubt as between the parties to the suit.

The learned District Judge therefore, fell into a grave error of law in refusing to go into the question whether the defendants held a reasonable title and whether they had the power to transfer it as this was a crucial issue in the case upon which a proper decision of this case rested. In fact the approach of the learned Judge was entirely wrong and this completely vitiates his judgment. As to authority for the view which I have felt persuaded to propound above, learned counsel for the parties were unable to cite any one way or the other. However, I have been able to find out the following English cases which throw a flood of light on the point under consideration and which greatly fortify me in coming to the conclusion to which I have.

14. In Glass v. Richardson, (1852) 9 Hare 698, Turner V. C. in a suit for specific performance between a vendor and a purchaser observed as follows :-

'The question which the Court has to try in this case, as in other cases of the like nature, is attended with peculiar difficulty, The Court has to determine, in the absence of a third party by whom a claim is or may be advanced, whether there is any just foundation for the claim. On the one hand, the Court has to take care that the just rights of the party asking for its interference are not defeated by the assertion of an unfounded claim; on the other hand, it has to take equal care that the party against whom its interference is sought is not exposed to the danger and expense of contesting a claim, which may be founded upon substantial grounds.'

14a. Again James L. J., delivering the judgment of the Court of Appeal in Alexander v. Mills, (1870) 6 Ch A 124 laid down that, barring exceptional cases, it was a general and almost universal rule to decide questions of law between a vendor and a purchaser; though it must be added as Jessel, M. R. pointed out in Osborne to Rowlett (1880) 13 Ch D 774 that any such decision does not technically bind any one else but the parties actually before the Court and does not prevent any person not bound by the decision from at any time bringing fresh litigation upon the purchaser with reference to the same title.

15. The last case that may be cited in this connection is Smith v. Colbourne, (1914) 2 Ch 533 where Cozens-Hardy M. R. made the following trenchant observation :--

'Lastly it was urged that the title is too doubtful to be forced upon a purchaser. The Courts have in modern times not listened with favour to such a defence. It is the duty of the Court, unless in very exceptional circumstances, to decide the rights between the vendor and the purchaser, even though a third person not a party to the action will not be bound by the decision.'

16. The correct legal position, therefore, is that when a question of title is raised in a suit for specific performance between a vendor and a purchaser, it has got to be decided between the par ties to the suit even though this may have to be in the absence of some other person or persons who may be interested in the title of the property in question but have not been made parties to the suit and, therefore, are not before the Court.

And the Courts are bound to and should pronounce upon the efficacy or otherwise of the title in question in such cases, (though the judgment of the Court in such an action would be only in personam and not in rem) except perhaps in rare and exceptional cases but which again goes to prove the rule and not the exception.

It only remains for me to point out that the principle propounded above would be as much applicable to a vendor's suit for specific performance as to a purchaser's suit for refund of earnest money or for damages as the case may be, for I can see no valid reason whatever for making any distinction between the two classes of cases so far as the applicability of the principle under consideration is concerned. I hold accordingly.

17. The question, therefore, which falls for decision is and must be whether the defendants in this case can be held blameworthy under Section 55(2) of the Transfer Property Act for having failed to give the warranty of title imposed upon a vendor under that section as alleged by the plaintiffs.

18. But in order to be able to decide this question properly, I shall first address myself to the precise content and ambit of the principle of warranty of title enshrined in Section 55(2) of the Transfer of Property Act. It seems to me to be pertinent to draw attention in this connection to Section 25 of the Specific Relief Act (No. I) of 1877 which contains an 'analogous and a complimentary provision relative to the right of a vendor to enforce specific performance of an agreement to sell movable or immovable property.

Section 25 (b), broadly speaking, provides that a contract for the sale of movable or immovable property would not be capable of specific enforcement at the instance of a vendor who though he may have entered into the Contract believing that he had a good title to the property, cannot at the time fixed by the parties or the Court for the completion of the sale give a purchaser a title free from reasonable doubt. What a seller is, therefore required to give is a 'marketable title' or as Section 25 of the Specific Relief Act describes it, 'a title free from reasonable doubt'. If he can ensure that, I think it? should be sufficient compliance with the requirements of Section 55(2) of the Transfer of Property Act, also.

19. The question then is what is a marketable title or a title free from reasonable doubt in this context? There are numerous English and Indian decisions on this point and I do not pretend to refer to all or a number of them. The leading English case on this subject which seems to have been followed by the High Courts in our country is Pyrke v. Waddingham, (1852) 10 Hare 1, Turner, V. C., laid down in this case that a marketable title is one which, so far as its antecedents are concerned, may at all times and under all circumstances be forced upon an unwilling purchaser.

See J. N. Duggan v. K. M. Talyarkhan, AIR 1938 Bom 77. Again, according to the learned Vice-Chancellor, such a title cannot be held to be made out where the purchaser,

'if compelled to take the title, might not be exposed to substantial and not merely idle litigation, or even that he would be free from all possible hazard.'

I should, however, like to point out, with utmost deference, first, that to give a precise definition of what would be a marketable title is a task fraught with no small difficulties, and, secondly, that what is still more difficult is the problem of the actual application of the various tests which have been laid down for the determination of this question from time to time.

A classic instance of this difficulty is exemplified by the case of Muliings v. Trinder, (1870) 10 Eq 449, in which notwithstanding that on facts it was a case on all fours with Pyrke's case, (1852) 10 Hare 1, the actual decision arrived at in the latter case was disapproved although the principles laid down in the earlier case were accepted and not departed from.

20. Again, the prevailing rule in the English Courts at one time seems to have been that a Judge of the appellate Court would not force a title on a purchaser in opposition to the decision of the Court below even though the former was clearly of the opinion that the decision of the inferior Court on the question of title was wrong.

Since Pyrke's case, (1852) 10 Hare 1 was decided there has, however, been a swing of the judicial pendulum in the decisions of English Courts, and it has been firmly laid down that an unfavourable decision in the inferior Court cannot Tender a title doubtful, and the Judge of the superior Court would nevertheless be bound to exercise his own judgment and where he comes to the conclusion that there is no reasonable doubt about the title offered, he would be free to and should give effect to his own judgment.

See Sheppard v. Doolan, 3 Dr and War 1 at p. 8 and (1880) 13 Ch. D 774. I do not propose to elaborate the point further and would content myself by saying that, to my mind, the one broad test which applies to a case like the present, may be put in plain language somewhat like this. A marketable title is a title which reasonably and strictly speaking a vendor would be in a position to force on an unwilling purchaser, under all circumstances, and which, therefore, is not afflicted with doubt On facts or law relating thereto, -- a doubt, however, which is not merely frivolous or idle but which a Court of law would be disposed to regard as serious or sufficient, having regard not only to its own opinion on the matter but also to the probable opinion of other competent persons on it, so that it would not be prepared unhesitatingly to force the same on the unwilling purchaser.

I should also like to add in this connection that although it has been tersely stated many a time that a purchaser cannot and should not be compelled to buy a law suit, this proposition cannot be stretched to mean that a probability of litigation howsoever remote or a threat thereof almost entirely empty and having no reasonable chance of success would be a sufficient reason for holding a title to be doubtful and therefore not deserving o specific performance.

To borrow the language of Lord Hardwicke in Lyddal v. Weston, (1739) 2 Atk 19, the Court must govern itself by a moral certainty, for it is impossible in the nature of things that there should be a mathematical certainty of a good title. In other words, the doubt to be effectual must be a rational doubt and not the doubt of a weak or vascillating mind. It may be further added that it is extremely difficult to lay down any hard and fast formulae with which to judge this requirement of a good title in a given case, and after all is said and done, each case will have to be decided on its own facts and circumstances. With respect, I hold accordingly.

21. Let us now see how the principles enunciated above apply to the facts and circumstances of tEe present case.

22. At the very outset, it may be well to remember that there was no contract to the contrary excluding the application of Section 55(2) of the Transfer of Property Act in the present case. In fact it was clearly stipulated by the defendants in the agreement Ex. 1 that should any trouble arise later with respect to the title of the plaintiffs which they were purchasing, the former would be responsible to them and make good any losses which they may have to suffer on this account.

Section 55(2) is, therefore, fully attracted and it cannot but be accepted that it was and would be the duty of the defendants who were the vendors to guarantee a marketable title to the plaintiffs. The question I have to decide, therefore, is whether the defendants possessed a marketable title or a title free from all reasonable doubt here and they had authority to transfer the same to the plaintiffs.

23-24. Now as to title, I may state at once that it is the common case of the parties that the property in suit originally belonged to Bherunlal Gelda. It is further common ground that the defendants do not have a registered deed of sale in their favour in respect of this property and to this extent their title is certainly imperfect. (His Lordship considered the defendants' case and the evidence oral and documentary, therein and proceeded.

25. Again, I should like to point out that although the defendants' title may not have been perfect from the conveyancer's point of view, they did have possessory title with respect to the property in question which may well be held to be free from all reasonable doubt. Even according to the evidence given by Rajmal, pleader on behalf of Bherunlal Gelda, he had been out of possession Of the suit land for a period of eight years or so; but it seems to me incontrovertible that the defendants have been in possession of the land right from 1937 when they were given the patta of the land Ex. A-7 by or on behalf of Bherunlal in pursuance of the agreement for sale Ex. A-8.

There is no doubt, therefore, that Bherunlal had been out of possession of the said land for 16 years in 1953. Nor is it contended before me that Bherunlal the alleged original owner has done anything during all these years, down to date, to question the possessory title of the defendants with respect to this land. A pretence was indeed made of mentioning in the notice given by Shri Rajmal on behalf of Bherunlal that proceedings were afoot against the defendants in Courts of law for their eviction from the suit land.

There is, however, not a scintilla of evidence on the record to show that any such step had ever been taken. In fact, learned counsel for the plaintiffs has frankly admitted before me that to his knowledge no such action has been brought by Bherunlal even to this date. There is also material on this record to show that since the defendants came into possession of the land in question, they raised some construction on the land in 1943, that is, some six years after they entered into possession thereof and yet Bherunlal Gelda does not seem to have had the courage to protest against this, much less institute an action against the defendants in that regard.

It may also be mentioned here that the defendants had fully set out the history of the title they had in their last letter Ex. A-4 sent to the plaintiffs in reply to their letter dated the 1st May, 1953, and unequivocally claimed that they had a good title to the suit property and were in a position to defend it against Bherunlal Gelda or for that matter any body else. A question may be posed here: Suppose Bherunlal Gelda brought an action for possession against the defendants now (or even in 1953) has he (or could he have had) a good prima facie case to succeed against the present defendants? Although this question can be finally and conclusively answered only in an action to which Bherunlal himself is a party, still I am posing this as it furnishes a good practical standpoint from which to look at this case in order to determine whether the defendants can be held to have made out a reasonably good title to the property in suit. The answer to this question in my judgment can only be an emphatic negative.

The defendants have clearly been in possession of the suit land in their own right and adversely to that of Bherunlal Gelda for about 23 years since 1937. It is true that they cannot show a duly registered deed of sale in their favour from Bherunlal Gelda and to that extent their title undoubtedly suffers from infirmity, and it is indeed somewhat of a mystery which has not been cleared on the record as to why such a deed was not executed although Bherunlal undoubtedly gave patta of the suit land to the defendants and also parted with its possession in their favour.

But even so, they should have been and would be in a position to rely on the sale-agreement of 1937 in their favour on the doctrine of part performance and use it as an effective shield against the true owner. Putting the matter from yet another angle, if Bherunlal filed a suit on the ground of title and dispossession, the defendants should, in my view, be perfertly entitled to raise the plea of limitation against Bherunlal inasmuch as he has been cearly out of possession for upwards of 12 years and his suit does not appear to me to have even a remote chance of success.

I may also point out in this connection that there is authority for the proposition that if a proper title by adverse possession can be successfully made out, this would fulfil the defendants' obligation to make out a marketable title. See Atkinson and Horsell's Contract, In re, (1912) 2 Ch 1 and AIR 1938 Bom 77.

26. In these circumstances, I am quite definitely of the view that the defendants in the present case did and do have a marketable title as to the suit property in their favour, -- a title free from all reasonable doubt which, if put to test in a Court of law in 1953 or now would have had or have an excellent prospect of success against the original owner Bherunlal Gelda and which the latter could challenge only at his peril and again which he has done nothing to challenge throughout this long period of 23 years.

It is but a short step from this to hold that the defendants were fully entitled in law to pass on this title to the plaintiffs. As I have already discussed above, the plaintiffs were themselves satisfied of this but they seem to have changed their mind later for reasons best known to themselves. One more question may, however, be posed at this juncture that if the defendants had a good transferable title and as they had indeed struck an excellent bargain in the sense that they stood to get Rs. 12,000/- from the plaintiffs for a property which they had purchased for Rs. 1500/- or Rs. 1600/- only, what prevented them from filing a suit for specific performance against the plaintiffs.

The question is a pertinent one and I put it to learned counsel for the defendants in the course of arguments and the reply was, first, that since the defendants had purchased the land they had incurred some expenditure on it in the shape of building a compound wall and some apartments also, and secondly that land prices had shot up and are still soaring high in Bhilwara (which is fast growing as an industrial town), and the defendants hope to get a still better price for this property in case they should feel inclined to sell it.

Learned counsel for the plaintiffs had nothing to say against this, and I am satisfied that this satisfactorily explains why the defendants were content to Jet the bargain fall through. Be that as it may, I have no doubt that on the findings at which I have arrived above, the plaintiffs must be held to be guilty of having broken the contract and not the defendants, and, therefore, they have no right to get back the earnest money from the defendants and the same must stand forfeited to the latter.

27. In the result, I allow this appeal, set aside the judgments and decrees of the two Courts below, and hereby dismiss the plaintiffs' suit, with costs throughout. Leave to appeal is refused.


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