(1) The defendant is the appellant. The respondent-plaintiff filed a suit for recovery of the sale price paid by him to the defendant and for damages suffered by him.
The defendant sole the suit property along with standing chilli crops on 30-9-1954 to the plaintiff by means of a registered sale deed for Rs.700. One Manickam Pillai, who was the owner of S. F. No. 20/14 and 21/2, agreed to sell S. F. 21/2 to the defendant and S. F. 20/14 to one Rajammal and others Sale deeds were executed by Manickam Pillai as per agreement. When the sale deed was actually within in favour of the defendant in respect of S. F. 21/2, S. F. 20/14 was wrongly inserted. A similar mistake was committed in the case of the sale deed in favour of Rajammal. In spite of this mistake, the defendant was actually enjoying S. F. 21/2, a land of inferior quality without irrigation facilities, whereas Rajammal was enjoying S. F. 20/14, a land superior in quality having irrigation facilities. After the sale, the parties were in enjoyment of their respective properties for four years. The mistake was subsequently found out and rectification deeds were executed on 5-8-1954.
The plaintiff, a relation of the defendant and an enemy of Rajammal's husband coming to know of the mistakes in the sale deeds executed by Manickam Pillai and with a view to giving trouble to Rajammal's husband prevailed upon the defendant to execute a sale deed in his favour of Rs.700 in respect of S. F. 20/14. After purchasing the property, the plaintiff filed a suit O. S. 178 of 1954 against Rajammal and other for declaration of his title and in the alternative for possession. He lost in all the courts incurring certain expenses.
The present suit is filed by the plaintiff for the recovery of the sale price and for expenses incurred by him in the courts in the litigation in O. S. 178 of 1954. So far as the purchase price of Rs.700 is concerned, there is no controversy here. The trial court gave a decree against the defendant directing the return of the purchase price with interest and disallowed the expenses incurred by the plaintiff in the prior litigation. The plaintiff preferred an appeal regarding the expenses disallowed in the prior litigation. The plaintiff preferred an appeal regarding the expenses disallowed in the prior litigation. The lower appellate court allowed the expenses as well and decreed the suit as prayed for by the plaintiff. In this second appeal, it is contended that the plaintiff is not entitled in law to recover the litigation expenses.
(2) It is common ground that the plaintiff knew that the defendant had no title to the property conveyed by him. The defendant was also aware of the fact that he was not entitled to the survey number which he had conveyed. The plaintiff prevailed upon the defendant to execute the conveyance for the purpose of giving trouble to his avowed enemy Rajammal's husband and others. The question that arises for consideration is whether under the circumstances, the plaintiff can claim the refund of not only the purchase price but also the damages which he suffered.
(3) Section 55 of the Transfer of Property Act provides that in the absence of a contract to the contrary, the seller is bound to disclose to the buyer, any material defect in the property of which the seller is, and the buyer is not aware and which the buyer could not with ordinary care discover. Sec. 55, clause 2 of the Act provides that the seller should be deemed to contract with a buyer that the interest which the seller professes to transfer, to the buyer subsists and that he had power to transfer the same.
It has been held that mere knowledge of the defect in title by the purchaser would not disentitle him to recover the damages sustained by him due to defect in title. In Adikesavan Naidu v. Gurunatha Chetti, ILR 40 Mad 338: (AIR 1918 Mad 1315) a Full Bench of this court held that the knowledge of the purchaser of the defunct of title in his vendor did not affect his right to recover damages. In the case before the Full Bench it was also held that the manager of a joint Hindu family who agreed to sell immovable property belonging to himself and the mint members of the family was personally liable under S. 73 of the Contract Act, for damages for failure to perform the contract when it was found that it was not binding on the minor. The fact as found by the Full Bench in that decision at page 350 are as follows-
"In this case it appears from Ex. A that the vendor represented that there was necessity for selling the property in dispute. The purchaser, so far as the question lay between him and the vendor, was entitled to rely on that representation. If the representation proved to be incorrect as it eventually did, I fail to see any reason why the vendor should not be held responsible for any loss that resulted therefrom to the buyer".
It may be noted that in the case cited, the manager did make a representation which the vend relied on and that representation was proved to be incorrect. But in the case before me, the plaintiff knew full well that the defendant had to title and was deliberately purchasing litigation.
In Md. Ali Sheriff v. Venkatapathi Raju, 39 Mad LJ 449: (AIR 1920 Mad 634) a Bench of this court held that mere knowledge on the part of the vend of a defect in the title of the vendor would not by itself defeat the vendee's right on the basis of a convenient implied by Section 55, clause (2) of the Transfer or Property Act. In the case cited, the property which had been purchased from the widow of a deceased Hindu was sole to the appellants and the reversioners of the widow obtained a decree setting aside the sale by her and took possession of the property sold to the appellants. It was observed by the Bench:
"It must be taken to be well established that mere knowledge on the part of the vend of a defect in the title of the vendor would not by itself defeat the vendee's right on the basis of a covenant implied by S. 55 Cl. (2)." In Arunachala Aiyar v. Ramaswami Aiyar, ILR 38 Mad 1171: (AIR 1915 mad 742) a bench of this court approving the decision in Subbaraya Reddiar v. Rajagopala Reddiar, ILR 38 mad 887 :(AIR 1915 mad 708) held that the contention that a covenant for title cannot be implied where the buyer knows the defect of title could not be accepted. In Gopala Iyengar v. Mummachi Reddiar, 17 Mad L. W. 245, at p. 266 :(AIR 1923 Mad 392) (at p. 399) it was observed:
"When a man makes no enquiry or willfully abstains from enquiry, the law presumes that he had knowledge of all the facts which an honest enquiry would have laid bare. In these circumstances, it cannot be contended for a moment that the plaintiff is a bona fide purchaser.... His object as stated by the Subordinate Judge was to get the plaint property by hook or by crook.... His sole object seems to have been to put up a claim for the plaint property by means fair and foul".
On the facts found, the Bench held that in the circumstances the plaintiff could not claim any amount alleged to have been paid by him for relieving the burden on the plaint property from the first defendant as he was a mere speculator and was a mere volunteer who made the payments officiously in order to make out a title to the property.
In Yegnanarayana v. Yagannadha AIR 1932 Mad 1(2), the learned Judge referred to the Full Bench decision in ILR 40 Mad 338 :(AIR 1918 Mad FB). Following the dictum in the above Full Bench decision that knowledge of the purchaser of the defect of title in his favour does not affect his right to recover damages, the learned Judge observed at page 5:
"...... if an act is unlawful of the doer of it know it to be unlawful as constituting either a civil wrong or a criminal offence, he cannot maintain an action for contribution or for indemnity against the liability which results to him therefrom; and that an express promise of indemnity to him for the commission of such an act is void".
In the above case, the facts found were that the plaintiff was told by the first defendant that he had already entered into a contract with his brother to sell the suit lands to him and the plaintiff tempted him to break that contract by offering to purchase the lands at a higher price and also undertaking to risk the consequences of the litigation that might ensue as a result of the breach of contract.
(4) The correctness of the principle laid down in ILR 40 Mad 338 :(AIR 1918 Mad 1315 FB) that knowledge of the purchaser of the defect of title in his vendor does not affect his right to recover damages cannot he questioned but it can be confined only to cases where the plaintiff believed the representation and accepted the same, and the representations did not turn out to be correct as in the case of the representations made by the manager of a joint Hindu family or in the case of sale by a widow. But the rule cannot have any application to a case where the plaintiff, as in the present case, himself knew full well that the defendant had no title to the property. This is the view that was taken in 17 Mad LW 254 :(AIR 1923 Mad 392) and AIR 1932 Mad 1(2).
By Section 55, clause (2) of the Transfer of Property Act, there is an implied contract by the seller 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. This is applicable only to case where there is representation which the buyer accepted though he might have been aware of the defect but hoping that the defects would not affect him. But when the buyer himself knew full well that the seller had no title and was entering into the transaction with full knowledge of want of title this implied warranty cannot be invoked. The validity of the contract itself is questionable as opposed to section 23 of the Contract Act as the object of the agreement itself is fraudulent involving injury to the person or property of another. In the circumstances it has to be held that the plaintiff cannot recover the expenses incurred by him in the prior litigation.
(5) The appeal is allowed to the extent indicated above. The judgment and decree of the lower appellate court are set aside an those of the trial court restored. There will be no order as to costs here. No leave.
(6) Appeal allowed.