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Sri Pusapati Venkatapathiraju Garu and ors. Vs. Sri Raja Vatsavaya Venkata Subhadrayyamma Jagapati Bahadur Garu - Court Judgment

LegalCrystal Citation
CourtChennai
Decided On
Judge
Reported in47Ind.Cas.563
AppellantSri Pusapati Venkatapathiraju Garu and ors.
RespondentSri Raja Vatsavaya Venkata Subhadrayyamma Jagapati Bahadur Garu
Cases Referred and Abdul Wahid Khan v. Shalukha Bibi
Excerpt:
contract act (ix of 1872), sections 23, 32, 55, 64, 65 - contract to finance litigation and to share in property decreed on success, nature of--loan--contingent contract--construction of document--champerty--failure to advance full amount agreed upon, effect of--breach of contract--refund of consideration advanced, right of lender to--stipulation for compromise in particular manner and charge on amount of compromise--compromise effected differently--charge, enforce-ability of--assignment of future property, validity of--benefit of contract, participation in, where no privity, effect of--transfer of property act (iv of 1882) sections 5, 6, 58--registration act (xvi of 1908), section 49--charge unregistered, creation of, on moveables and immoveables effect of. - - after arguments had.....1. this is an offshoot of the suit for vizianagaram zemindari, namely original suit no. 18 of 1903, on the file of the district court, vizigapatam. the present defendants were the plaintiffs in that suit, and it was instituted to recover the zemindari of vizianagaram. that suit was dismissed by the court of first instance in 1908. an appeal was preferred to the high court wbich was disposed of by a compromise in march 1913. the present suit is by the widow of the zemindar of tuni, who financed that litigation on behalf of the plaintiffs (the present defendants), for a sum of nearly two lakhs of rupees. the subordinate judge decreed the claim.2. the negotiations which led to the contract need not be gone into in any detail. up to may 1906 the expenses of the litigation were borne by the.....
Judgment:

1. This is an offshoot of the suit for Vizianagaram Zemindari, namely Original Suit No. 18 of 1903, on the file of the District Court, Vizigapatam. The present defendants were the plaintiffs in that suit, and it was instituted to recover the Zemindari of Vizianagaram. That suit was dismissed by the Court of first instance in 1908. An appeal was preferred to the High Court wbich was disposed of by a compromise in March 1913. The present suit is by the widow of the Zemindar of Tuni, who financed that litigation on behalf of the plaintiffs (the present defendants), for a sum of nearly two lakhs of rupees. The Subordinate Judge decreed the claim.

2. The negotiations which led to the contract need not be gone into in any detail. Up to May 1906 the expenses of the litigation were borne by the present defendants from their own pocket. On the 22nd May 1906 the first agreement Exhibit A was executed by the 2nd defendant and his sons, the 3rd and 4th defendants, to the then Zemindar' of Tuni, by which in consideration of the latter agreeing to assist the defendants with money for the expenses of the litigation, they undertook to give him a certain share .in the Zemindari. Exhibit Al was also executed on the same day to sell a share of the estate. On the 14th August 1907 Exhibits B and Bl were executed, which altered the original agreement in some material particulars. We shall have to refer to these agreements at some length later on. After arguments had begun to be addressed by the Pleaders engaged in the Vizianagaram case, the Zemindar of Tuni complained that the funds supplied by him were being misspent by the defendants. This led to angry correspondence between the parties, and ultimately the Zemindar of Tuni refused to advance any further sums. This was about the end of February 1908. The suit was proceeded with with the help of others and judgment was pronounced against the present defendants on the 25th July 1908. It is common ground that the Zemindar of Tuni did not supply any funds for the appeal filed in the High Court, nor was he asked to do so. The amount advanced by the plaintiff's husband before February 1908 amounted to about Rs. 93,000. The Zemindar of Tuni died in 1911.

3. The plaint in this suit, as originally framed, alleged that the defendants broke the contract and that the plaintiff was entitled to be paid out of the moneys secured under the compromise the amount of principal and interest due to her for the moneys actually lent, and that she was also entitled to a 3/32nd share in the balance of the compromise amount and in the annuities secured under the compromise. The plaint was subsequently amended by alleging, in the alternative, that it having become impossible for the plaintiff's husband to be a party to the compromise owing to his death, and also because of the fact that Mr. V. Krishnaswami Aiyar on whose assent the compromise was to be effected died on the 22nd December 1911, the contract between the parties became void, and 'that Sunder Section 65 of the Indian Contract 'Act the plaintiff is entitled to a refund of the moneys actually advanced by her husband, although she may not be entitled to specific performance of the contract to give a share in the balance of the compromise amount and in the annuities. These new allegations are contained in paragraph 29 (a), (6) and (c) of the plaint and in prayer (e) of paragraph 38. The 2nd defendant's plea is that the plaintiff's husband broke the contract, and as the agreement was champertous she is not entitled to any relief whatsoever. He also pleads the bar of limitation. Defendants Nos. 1, 5 and 6 contend that they were not parties to the arrangement entered into by the 2nd defendant with the Zemindar of Tuni and that their share in the compromise amount is not liable for the plaintiff's claim. A large number of issues were framed by the Subordinate Judge. With most of them it is not necessary to deal in this appeal. His main conclusions are that the second agreement sperseded the first; that the plaintiff's husband' was justified in breaking the contract between him and the 2nd defendant; that the suit is not barred by limitation; that the share of defendants Nos. 1, 5 and 6 is also bound by the contract of the 2nd defendant. On the additional issues framed regarding Section 65 of the Contract Act, his finding is that Section 65 applies to the case and that the plaintiff is entitled to a refund of the amount actually advanced by her husband with interest thereon.

4. A number of interesting questions of law have been argued before us by the Advocate-General on one side and by Mr. K. Srinivasa Aiyangar on the other. Before dealing with the legal questions, we shall first consider the question as to who broke the contract. The Subordinate Judge's judgment is by no means full or clear. We have been obliged to deal with the facts of the ease as if we were bearing the ease as the Court of first instance.

5. The main features of the two agreements should be set out before proceeding to examine the other documents bearing on the question of the breach of contract. Under Exhibit A the arrangement was that the Zemindar of Tuni should advance Rs. 1,50,000 for the expenses of the suit, and that 3/l6th of the property in suit,, namely the Zemindari of Vizianagaram should be conveyed to the lender for that consideration. The sub paragraphs of paragraph 1 refer to the mode of application of the money to be advanced. Paragraph 2, sub-paragraphs (a) and (b), deal with the mode of conveying 3/16th share. 2(c) says that if the lender was unwilling to take either a sale-deed or a permanent lease of the Zemindari, the debtor shall pay the amount with interest at 3 per cent, per mensem thereon on the security of the Zemindari. There is a penal provision in 2(d) which we need not refer to. Paragraph 3 is important. It provides for the creditor advancing not less than Rs. 50,000 and that if he was unwilling to lend further sums certain modified terms should be substituted. The 3rd clause of that paragraph says: If you should yourself give up the conduct of the above said suit in the lower Court without spending the Rs. 50,000 as above said, you shall forfeit all expenses incurred till then.' Clause 5 of the same paragraph says that no compromise should be entered into without the consent of the creditor. Exhibit Al is merely an agreement to convey the 3-16th share in case the Rs. 1,50,000 was advanced by the creditor. A and Al were in May 1906. Apparently after the suit had proceeded for some months, it was found that more money would be required than was agreed upon in Exhibit A, and apparently also the parties intended to change the terms of the contract in some particulars. As a result of further negotiations, Exhibits 6 and Bl were executed on the 14th August 1907. Exhibit B 'corresponds to Exhibit Al and B1 to A. We are mainly concerned with Exhibit Bl. The material changes introduced in the new agreement may be thus stated:

(a) Instead of Rs. 1,50,000 the lender agreed to advance two lakhs of rupees if these were required.

(b) Instead of getting only a 3/16fch share the lender secured a fourth share and also an additional property which was the summer residence of the Zemindar.

(c) The stipulation as to forfeiture was omitted.

(d) The old provision that there should be no compromise without the consent of the lender was re-inserted with a proviso that if Mr. V. Krishnaswami Aiyar advised that a compromise was beneficial, it should be agreed to.

6. These are the main differences between the first and the second agreements. At the time of the second agreement the plaintiff's husband had lent Rs. 66,000. In paragraph 2 of Exhibit B1 it is stated that Rs. 66,000 plus a sum of Rs. 5,500 spent by the lender himself had been advanced up to that date; and that a further sum of Rs. 16,000 would be paid almost immediately. The same paragraph says: 'ft is also agreed that we should be rendering accounts as stated above and you should be again giving money within a week after being asked for.' There is a dispute as to whether the last portion of the 1st paragraph and the 2nd paragraph have been correctly translated. So far as the 1st paragraph is concerned, a fresh translation has been made which has been accepted by the learned Vakils as fairly accurate. As regards the 2nd paragraph the Chief Interpreter admitted that the language is so ambiguous that he is unable to say whether the parties intended to say that no further accounts regarding the Rs. 66.0C0 should be asked for or whether they stipulated for a fresh scrutiny of the accounts in respect of the sums already expended. Having regard to the fact that full accounts had not been furnished by this time, we are inclined to agree with the learned. Vakil for the respondent, though not without some hesitation, that the parties did not understand by paragraph 2 that there should be no scrutiny of the accounts in respect of moneys already advanced. The Rs. 16,000 agreed to be lent immediately under the new agreement was given within three months of that agreement. Admittedly before the second agreement, Exhibit G was sent by the 2nd defendant on the plaintiff's husband. That accounted for an expenditure of Rs. 49,117 and gave credit to a sum of Rs. 38,000 received. It showed a balance of Rs. 11,117-10-7 as being still due. This was on the 11th January 1907.. Exhibit Gl is dated the 31st August 1907. Although it covers a period before the second agreement was entered into, it is clear that this account was not in the hands of the plaintiff's husband when Exhibit B1 was signed. G2, dated 6th January 1903, gives particulars of expenditure aggregating to Rs. 36,141-10-8 and acknowledges receipt of Rs. 27,000, leaving a balance of Rs. 9.141-10-8 to be paid by the creditor. Between the date of the second agreement and January 1908 the parties seem to have been working har moniously. On the 19th January J 908 the first note of discord appears. Exhibit F written on that date by the Diwatf of the Zemindar of Tuni to the 2nd defendant complains: 'Contrary to the original agreement the amount of Rs. 10,450 for the day fees of M. R. Ry. B. Venkatapatiraju Garu and Rs. 2,165 for the fees of the said Venkatapatiraju Gam's younger brother are entered therein. These items were read out to Sri Maharajahvaru. He was pleased to say that settlement was not made to pay fees to these persons and that Rs. 12,615 specified as fees payable to those persons should be recovered from them, and expended for the costs of the suit in future'. At the end of the letter it is stated: 'in your credit and debit accounts, particulars of some items are not written. I shall write the letter soon about them. Immediately after this t credit and debit are settled, I shall send the money required'. By this time Exhibit G was in the hands of the Zemindar and his Dewan. Neither at the time of the second agreement nor until this date was any complaint made that out of the moneys advanced by the Zemindar of Tuni the two Vakils referred to in Exhibit F should not have been paid. It was conceded that there is no Writing to show that these two gentlemen were not to be remunerated from the funds supplied just like other Vakils engaged in the case. We are referred to some evidence regarding an oral agreement between the Zemindar of Tuni and the 2nd defendant. We have not the least hesitation in saying that we do not believe this evidence. The reply to Exhibit F is Exhibit IX, It is dated the 27th January 1908,, It draw? attention to the fact that accounts had been sent containing entries. of payments to the two Vakils and .that those entries had not been objected to at the time of the second agreement; it also contains a denial of the suggestion that the two Vakils agreed to work gratis, One statement in that letter was somewhat sharply criticised by Mr. K. Srinivasa Aijangar. About the end of this long letter the 2nd defendant says: 'Moreover, I have sold some portion out of the land I am entitled to in the Vizianagaram Samasthanam and have deposited the said sale amount with you on account of the expenses of the suit, settling that you will give the money whenever asked by ma. While so you cannot raise such objections as these.' It is true that this is a rather extravagant way of stating that the indebtedness is on the side of the plaintiff. But if we look at Exhibit B, the language does not appear to be altogether irrelevant. This is what Exhibit B says: 'We further hereby declare to have received from you the abovesaid amount, Rs, 2,00,000, and its interest as abovesaid for the necessary suit expenses as consideration of the abovesaid sale-deed as per this second agreement, dated this day, and therefore execute to you the same.' Apparently the parties agreed to regard it on paper as if one-fourth of the Zsmindari was sold to the plaintiff's husband and that be was to treat himself as being in possession of the two lakhs of rupees, the consideration amount, as a depositary from whom the money for the expenses was to be drawn from time to time. Apart from this sentence no objection can be taken to the tone of the letter, Exhibit JX. We do not think the suggestion is in any way grotesque, having regard to the language of Exhibit B. After Exhibit IX was received, Exhibit F2 was sent by the plaintiff's husband to the 2nd defendant. Here again objection is taken to the payment to the two Vakils: 'Besides, some of your officials have told in person that no fees need be given to them'. It then proceeds to say: 'As the debit and credit accounts sent by you have not been examined previously, they have now been got examined... At the time when you first submitted credit and debit accounts we have not only said in a definite manner in the presence of many persons that fees should not be given to Sree Venkatapatiraju Garu and Sree Sarasimharaju Garu, but your men also have told us from the very beginning that as they are persons connected with you they will work in connection with this suit without taking fees.' The two statements are somewhat inconsistent, one statement saying that no accounts were looked into, the other that the accounts were looked into and that the defendants' men were told that these entries regarding payments to the two Vakils were objectionable. The letter winds up by saying: 'if before this you spend this money (referring apparently to the money to be got back from the two Vakils), you give proper particulars for such of the items as regards which no details were given or with regard to which there are disputes, and also send receipts and vouchers for the remaining items, namely, fees for Madras Vakils, etc., we shall compare them, and if we find them correct and proper, we shall send money if any more money is still wanted for purposes of this suit.' Here again for the first time we find objection is being taken to vouchers for payments made, not being sent. Before considering the reply to this letter it must be mentioned that on the same day as Exhibit F2, Fl was sent in which objection was taken to the expenditure on out fees and other miscellaneous charges and also to the failure to furnish details, vouchers and receipts for sums debited. The sums objected to do not amount to any large figure. To these two letters Exhibit Till was the reply. It is dated the 14th February 1908 and it says: 'The necessary particulars and the credit and debit accounts, as well as the receipts with my signatures, were given already. There is no necessity for your asking again regarding the settled credit and debit accounts and they are not wanted. Without raising any objection at that time, you are now raising objections, keeping something in your mind.I have no objection whatever to your ascertaining the particulars hereof if you want 'to know them. They might have been ascertained correctly from the account sent already. When credit and debit accounts were sent with my responsibility and signature, there will be no proper grounds for the stoppage of the business'. Apparently the 2nd defendant 'thought that some frivolous excuses were being offered to keep back the supply of money and that he was being unjustly suspected. That accounts for the tone of this letter. It is the letter of a map who felt that he was not in the wrong, and that the creditor was trying to find some excuse for breaking off the agreement. We do not understand this letter as a refusal to give the vouchers and receipts asked for in Exhibit Fl. It naturally complains that the objections taken to the accounts already sent are not bona fide. The Dewan in the witness-box stated that although he was 'appointed at the time the second agreement was entered into, he had not looked into Exhibit G1 before writing Exhibit F. It is impossible to accept this story. It may be that Zemindars are not in the habit of examining accounts bent to them, but to ask us to believe that the Dewan of the lender did not satisfy himself that the entries in the accounts sent before the new agreement was entered into were proper, is something which we . cannot .agree to. To Exhibit VIII; Exhibit M was the final rejoinder. That is dated 21st February 1908. The burden of that letter is that the money paid to the two local Vakils was improperly spent. It ends by saying: 'if you do not give a proper reply for this and as we consider that according to the terms of agreement without affecting our rights that the disputed terms are not properly debited under the suit costs, we shall take proceedings in the Court according to law for the recovery of the above sums from you and from those who have received the same from you.' There can be no doubt that this letter was intended to finally break off the relationship between the parties. In our opinion there was no justification for such conduct on the part of the plaintiff's husband. The attempt to prove that there was no agreement to remunerate the local Vakils from the funds supplied by the lender has miserably failed. On the other hand we have the evidence of the 2nd defendant, who has deposed straightforwardly that it was part of the original agreement that the local Vakils should be remunerated from the borrowed money. We have the fact that Exhibit G was sent containing various entries relating to payments to these two Vakils; it was in the hands of the plaintiff's husband and his Dewan long before the second agreement was entered into. We totally disbelieve the suggestion that the plaintiff's husband and his Dewan did not examine these accounts before Exhibit B1 was entered into. At the time of B1 at any rate' a Hew Dewan had taken charge of the plaintiff's husband's estate. We cannot accept his evidence/that he did not examine Exhibit G before the second agreement was entered into. There is no reason for presuming that the local Vakils were expected to work gratis. Mr. Srinivasa Aiyangar referred to the fact that the two Vakils were related to the defendants, and be also made a faint suggestion that the Vakils obtained a share of the money secured by the compromise. There is absolutely no reliable evidence for this latter suggestion. The fact that these Vakils were related is not a ground for holding that they agreed to work gratis ill the suit. It seem to us that the objection to the payments made to these Vakils was only a pretext for breaking off from the contract. We can only Conjecture the reasons, as the parties have not adduced all the evidence on the question of the motive which led the plaintiff's husband to refuse to finance the litigation any further. But we feel no hesitation in holding that the payment to these two local Vaklils was not a good ground for refusing to carry out the terms of the contract. Mr. K. Srinivasa Aiyangar commented upon the entries contained in Exhibits G and Gl and argued that they ore lacking in definiteness and that the creditor would be justified in objecting to the bald entries regarding large sums of money said to have been paid to Vakils. They may have furnished good grounds for asking for particulars and for objecting to make further payments unless these particulars were furnished. But it was not on these grounds that Tuni refused to advance farther sums. We are, therefore, unable to accept these post facto comments as having influenced the plaintiff's husband's conduct in the step he took. Apparently until the time of Exhibit F, the plaintiff's husband trusted to the honesty of the 2nd defendant and never doubted that any payments made by him were otherwise than honestly spent. There is no evidence that the 2nd defendant ever refused to give particulars. We must, therefore, hold that the contract was broken by the plaintiff's husband and not by the 2nd defendant.

7. It was argued by the learned Vakil for the respondent that it was only a term of the contract that was broken and not the contract itself. Our reading of the correspondence does not lead to this result. Exhibits F series and M leave no room for doubt in our mind that the plaintiff's husband intended to break off further connection with the 2nd defendant and that he did convey that idea to him.

8. This being our view on the most important question of fact in the case, we now proceed to consider whether, even though the plaintiff's husband may have broken the contract, the plaintiff is not entitled to recover the moneys actually advanced.

9. It is not easy to understand on what basis toe Subordinate Judge has given the decree in favour of the plaintiff. Mr. K. Srinivasa Aiyangar who appeared in support of the judgment contended that the money advanced by his client's husband was a loan, and that it was a charge upon the amount of the compromise. It may be that some such idea was present to the mind of the Subordinate Judge, as in paragraphs 2, 16 and 17 there is a reference to a lien. However, we have now to examine Exhibit B1 to ascertain whether the money advanced by the plaintiff's husband was regarded as a loan and whether it was made a charge upon the sum secured by the compromise. The learned Vakil for the respondent referred us to paragraphs 1, 4, 8 and 12 in support of his contention. In the 1st paragraph in more than one place the money to be advanced by the lender is spoken of as a loan. At the same time it must be mentioned that the vernacular expression used in the document is usually rendered as 'giving' or 'to give.' This is not seriously disputed. Therefore, too much importance cannot be attached to the use of the word 'loan' by the translator. The same observation applies to paragraph 4. In paragraph 8 the amount advanced is spoken of as principal and interest found due to you'. Again in paragraph 12 the expression is, the principal money advanced by you together with interest at Re. 1 per cent.' If the document stood by itself, there would be great force in the contention for the respondent that the money advanced was a loan, but we have to take into account the fact that the avowed object of the transaction was to finance a litigation against a person in possession and in favour of persons who were themselves unable to find the necessary funds. There is the further fact that the document provides that, even though less than Rs. 2 lakhs was advanced for the purpose, the lender was entitled to the sale of the share as if the full amount was paid. There is the additional circumstance that no provision is made for the refund of the amount in case the suit is dismissed. As against these considerations Mr. K. Srinivasa Aiyangar pointed to the fact that the Zemindar of Tuni, though not a relation of the defendants, belonged to their caste, and that it was considered a meritorious act to help that caste in getting possession of the property which the late Raja of Vizianagaram had resolved upon giving to a person who did not belong to the family. Taking all these various elements into consideration, we are not satisfied that the object of the undertaking was to give a loan. The transaction is on the face of it champertous, although as has been laid down by the Judioiall Committee, that would not prevent the promisee from recovering what he has advanced in case the litigation proved successful. The agreement between the parties partakes of the character of the contracts commented upon by the Judicial Committee in Ranee Bhobosoonduree Dossee v. Issur Chunder Dutt 18 W.R. 140 : 2 Suth. P.C. 616 and Kalka Singh v. Paras Ram 22 I.A. 68 Rafique & Jackson's P.C. No. 137 : 11 Ind. Dec. 290, to which our attention was drawn by the learned Advocate-General, as contingent contracts whose enforceability depended upon the happening of a particular event, namely, the success of the litigation. However, as the construction of the document is not altogether free from doubt, we do not propose to base our judgment on our surmise that the contract is not a loan.

10. Now we shall proceed to deal with the other arguments in the case on the basis that the plaintiff's husband advanced a loan to the 2nd defendant. The next question is whether a lien was created on the compromise amount by Exhibit Bl. There was ah interesting discussion by the learned Vakils on the question whether in India a charge can be created upon property which was not in existence on the date of the document. Mr. K. Srinivasa Aiyangar for the respondent relied upon the observations of Lord Watson in Tailby v. Official Receiver (1888.) 13 A.C. 523 for the proposition that an assignment of after-acquired property will be valid, provided it is identifiable. In the same case Lord Macnaghten points out:

It was well settled that an assignment of future property for value operates in equity by way of agreement, binding the conscience of the assignor, and so binding the property from the moment when the contract becomes capable of being performed, on the principle that equity considers as done that which ought to be done, and in accordance with the maxim which Lord Thurlow said he took to be universal that whenever persons agree concerning any particular subject, that, in a Court of Equity, as against the party himself, and any claiming under him, voluntarily or with notice, raises a trust The general trend of the views enunciated by the other noble Lords who took part in the case is in favour of holding that a transfer of property to come into existence at some future time is nothing more than an agreement to convey that property when it does come into being. This and other oases were considered very recently by the Court of Appeal in Industrials Finance Syndicate Ltd. v. Lind (1915) 2 Ch. 345. The question there was whether a mortgage* of an expectant share as one of the next-of-kin of a living person was good as against the trustee in bankruptcy. Warrington, J., held that it was, Industrials Finance Syndicate Ltd. v. Lind (1915) 1 Ch. 744. In the appeal against the learned Judge's judgment, Phillimore, L.J., states the law thus: 'Assignments of property not then in existence pass, as such nothing. A man cannot in equity', any more than at law, assign what has no existence,' ' See per Jessel, M.R. in Collyer v. Isaacs (1882) 19 Ch. D. 342. The assignment does, however, operate as a contract to assign if and when the property comes into existence, and to use the words of the same great Judge, 'when it has come into existence, equity, treating as done that which ought to be done, fastens upon that property and the contract to assign thus becomes a complete assignment.' This is in effect what Lord Maonaghten said in Tailby v. Official Receiver (1888.) 13 A.C. 523. Swinfen Eady, L.J., says the same thing in Hardy v. Fothergill (1888) 13 A.C. 351 : 58 L.J. Q.B. 44 Bankes, L.J., while affirming the above view, says at page 373 in Industrials Finance Syndicate Ltd. v. Lind (1915) 2 Ch. 345: 'it appears to me to be manifest from these statements of the law that equity regarded an assignment for value of future acquired property as containing an enforceable security as against the property assigned, quite independent of the personal obligation of the assignor arising out of his imported covenant to assign.' It was argued that an assignment of future property does not merely amount to an agreement to convey when the property comes into existence, but it is a right in rem. There are observations in the judgment of 'Warrington, J., which lend support to this broader contention. But it is unnecessary to pursue this subject any farther, because in either view, as pointed out by Phillimore, L.J., the right will not attach to the property if, when the property comes into existence, the contract had ceased to be enforceable. This is what the learned Lord Justice says at page 368: 'l do not understand, an assignment which at the time only operates as a contract, but when the property comes into possession operates without more as an actual assurance; and even if this were intelligible, I do not understand why in its chrysalis state it is not- subject to the laws of a chrysalis, why, being still only a contract, it is not discharged by a discharge of contracts.' The applicability of this doctrine to Indian conditions was hotly debated at the Bar. In the Transfer of Property Act, Section 6 enuncia as how far and to what extent properties can he transferred. In Section 5 the expression 'transfer of, property' has been defined as an act by which a living person conveys property, in present or in future, to one or more other living persons, 'etc. As pointed out by the learned Advocate-General, the existence of a comma after 'property' and before the words ' in present or in future ' shows that these words in present or in future ' govern the word ' conveys ', and not the word ' property.' Therefore, there is nothing in Section 5 to indicate that future property can be conveyed. The learned Advocate-General further argued that Clauses (a) to (i) of Section 6 are only illustrative of the general principle that future property should not be conveyed at all. There is great force in this contention. At the same time it must not be forgotten that the framers of the Indian Act were aware of the pronouncement in Tailby v. Official Receiver (1888.) 13 A.C. 523 wherein it was held that there can be a valid assignment of future property. It is more reasonable to hold that the Indian Legislature imposed restrictions upon the extent to which future property can be assigned. In other words, Section 6 must be read as an exception to the rule that future property can be conveyed, and j not as containing a total prohibition against r all future assignments. We have in the i Indian Contract Act provisions for transferring future property. As Mr. K. Srinivasa Aiyangar pointed out, the Indian Companies Apt seems to contemplate the transfer of future property. Therefore, we incline to the view that Section 6 must be construed as an exception to the general rule Jin favour of transfers of property, present and future. 'It is true, as the learned Advocate-General contended, the observations in Sumsuddin v. Abdul Husein 8 Bom. L.R. 781 on this (question are obiter, but having regard to the high authority of Sir Lawrence Jenkins who pronounced the judgment, and having .regard to the other reasons indicated by us, we think that Section 6 does not contain a total prohibition against the assignment of all future property. Nor are we prepared to agree with the contention that the words in Clause (a) of Section 6, 'any other mere possibility of a like nature', would cover cases like the present. Apart from the general rule that portions of the same section must be construed ejtisdem generis 'with the rest of the section, there is a. clear-indication in the words 'of a like nature1' that the possibility must belong to the same category as the chance of an heir-apparent or the chance of a relation obtaining a legacy. We are, therefore, unable to find any restriction against a transfer of the kind now in dispute in Section 6 of the Transfer of Property Act. On the question whether an immediate charge was created our attention was drawn to the decision in Palaniappa v. Lakshmanan 5 Ind. Dec. 1005, which seems to lay down the proposition too broadly. Navagee v. Administrator-General of Madras 22 Ind. Cas. 566 expresses the law more guardedly and we are inclined to agree with the latter decision.

11. As regards the contention that Section 58 of the Transfer of Property Act in speaking of mortgages uses the expression 'specific immoveable property,' it is enough to say that property can be specific so long as it is identifiable, though it may not be in existence on the date of the transfer, Therefore, on this part of the argument we are inclined (o agree with the contention of Mr. K. Srinivasa Aiyangar that the transfer, if otherwise valid, is not rendered inefficacious by reason of the subject matter not having been in existence on the date of the agreement.

12. The real difficulty arises from the use of the words ' moveable and immoveable properties obtained by such compromise' in Clause 12 of Exhibit B1. In Clause 9 a right is given to a twelfth of the property in case the whole of the expense for the litigation in the first Court is borne by the lender. The clause says: 'It has been agreed that you should without fail meet all the expenses incurred in the Original Court.'' Then comes Clause 10, which prohibits any compromise without the consent of the lender. Clause 11 stipulates for an enforceable compromise in case Mr. Krishanaswami Aiyar gave his assent to it. Then follows the expression in Clause 12 which we have quoted. The words 'such compromise' can only refer to a compromise to which either the plaintiff's husband consented or which was brought about on the advice of Mr. Krishnaswami Aiyar. It is not disputed that in the present case the compromise which came into existence was net due to either o these two contingencies. The argument that although a compromise may be otherwise brought about, it was open to the plaintiff's husband to have accepted such a compromise because the provision for his assent and for Mr. Krishnaswami Aiyar's advice was for his benefit, does not meet the difficulty. The lien which is claimed is in respect of a property got under a particular compromise. Whatever may be the personal rights against the debtor, treating the money advanced as a loan, in order that the lien may 'fasten upon the compromise amount, it must have relation to the two contingencies provided for in the agreement. The specific property or the identifiable property on which the lien is sought to be attached is not the property which the parties contemplated by the agreement. We may slate at once that we are in entire agreement with the contention of the learned Vakill for the respondent that the mere fact that only Rs. 93.000 out of the contemplated Rs. 2 lakhs was advanced would not derogate from the lien if it otherwise existed. It is settled law that a mere default on the part of the lender to pay the full amount of the charge would not deprive him of his lien in respect of the money actually advanced, See Anakaran Kasmi v. Saidamadath Avulla 14 Ind. Dec. 326 Chinnayya Rawutan v. Chidambaram Chetti 5 Ind. Jur. 356, Tirumal Raju v. Pondla Muthial Naidu 9 Ind. Cas. 289 : (1911) 1 M.W.N. 113, Rashik Lal v. Ram Narain 13 Ind. Cas. 573 and Munshi Bajrangi Sahai v. Udit Narain Singh 10 C.W.N. 932. These cases lay down that there will be a lien pro tanto notwithstanding default on the part of the lender. That principle would be applicable to the present case where the lender has advanced a portion of the amount which was agreed to be charged upon the property. But as we pointed out, the indentity of the property is wanting, as Clause 12 creates a charge only on property secured by a compromise effected in one of the two ways suggested in the previous clauses. In this view our conclusion is that no lien was created over the money given by the plaintiff's husband. The theory that a lien on specific property would attach, itself to the substituted property contemplates that the contract creating the original lien subsists. Granting for argument's sake that the lien on the compromise amount contemplated in Clauses 10 and 11 will fasten itself upon the new compromise amount, the fact that before that compromise was effected the parties had broken off relations, would render this impossible. Vide observations of Lord Justice Phillimore already quoted. We might also say that the fact that the agreement was not registered would not affect the creation of a lien, because under the compromise it was moveable property, namely money, that was largely secured, and it is against such moveable property that the Subordinate Judge has created a charge. In our opinion, Section 49 of the Registration Act leaves no room for doubt that where there is a blend of moveable and immoveable properties in respect of which a charge is created, if the document creating the charge is not registered, it would only deprive the promisee of his right in the immoveable property and would not affect his rights in the moveable property. See also Pulaka Veetil v. Thiruthipalli 1 Ind. Cas. 1.

13. Mr. K. Srinivasa Aiyangar put forward an alternative argument, to the effect that the refusal on the part of the plaintiff's husband to pay money did not put an end to the contract. He referred to the language of Section 55 of the Contract Act and argued that the contract was at an end only in respect of moneys to be advanced after the date of the breach. We agree, to this extent that it is not every repudiation that will entail a breach. See Chitty on Contracts, page 771. Feeth v. Burr (1874) 9 C.P. 208 and Mersey Steal and Iron Co. v. Naylor (1884) 9 A.C. 434 : 53 L.J.Q.B. 497, to which the learned Vakil drew our attention, relate to the performance of contracts on specified occasions. In those oases it was held that failure to perform the contract on one of the occasions would not necessarily put an end to the contract as a whole. But as we read Exhibit B1, this contract is not of that nature. It does not specify the dates or occasions on which the payments are to be made. Moreover Exhibit M finally and without reservation put an end to the contract as a whole. We do not think it is open to the plaintiff to say that the contract subsisted after the date of Exhibit M.

14. The next argument of the learned Vakil for the respondent is that Section 64 of the Contract Act applies to the case. We think he is right in this contention. The decisions in Chokalingam Mudaliar v. Mahomed Sheriff Saheb 17 Ind. Cas. 891 and in H. Dakin and Co. v. Lee (1916) 1 K.B. 566 bear him out in this contention. Therefore, if the suit were in time, although the plaintiff may not be entitled to a charge upon the property, she would still be entitled to a personal decree against the defendants. The argument of the learned Advocate-General on this part of the case is that the agreement is one and indivisible and that consequently there can be no apportionment on the principle of quantum meruit. The decisions in Tinder-wood v. Lewis (1894) 2 Q.B. 306and Sumpter v. Hedges (1898) 1 Q.B. 673 and the citations from Leake on Contracts all relate to cases where the performance of the contract in its entirety is rendered impossible by the breach of a single condition. For example, the case of the painting of a picture or the building of a house' entrusted to a person may become unenforceable if there is a breach in the course of the performance of the contract. The reference to solicitors' contracts is not in point, because, as is pointed out on page 88 of Leake on Contracts, under the English Law the solicitor can in equity claim payment for work done pro rata. In our opinion, an agreement t' advance money from time to time bears no analogy to oases of painting or building contracts. Therefore, we think that under Section 64 of the Contract Act tie party who paid money would be entitled to a refund of it, even though he did not perform the whole of his part of the contract. Accepting this view the difficulty is about limitation. A faint argument was put forward by Mr. K. Srinivasa Aiyangar that limitation would commence only from the date when the funds came into existiency We fail to see how the cause of action which accrued on the date of Epxhibit M can be regarded as having been suspended or stopped and having started again when the compromise money was secured. We think that as soon as the contract was broken, the plaintiff had a cause of action, and if she brought a suit within three years of that breach she could have recovered the money advanced by her husband. We must, therefore, hold that her claim is barred by limitation.

15. As regards, the liability of defendants 2Tos. 1, 5 and 6, there can be no doubt that the contract with the ' 2nd defendant is not binding on them. The learned Vakil for the respondent contended that the 2nd defendant was acting as their agent. There is no allegation about such agency in the plaint; there is no issue and there is no discussion in the lower Court's judgment on this question. Before the Subordinate Judge their liability was claimed on the ground that they benefited by the agreement of the 2nd defendant. The learned Yakil for the respondent frankly conceded before us that mere participation in the benefit will not render a party liable if he was otherwise not a party to the contract. We need only refer to Ram Tuhul Sing v. Biseswar Lall Sahoo 15 B.L.R. 208, Ruabon Steamship Co. v. London Assurance (1900) A.C. 6, Halima Bee v. Roshan Bee 17 M.L.J. 439 and Abdul Wahid Khan v. Shalukha Bibi 21 I.A. 26 : Rafique & Jaokson's P.C. No. 134 : 10 Ind. Dec. 961for the proposition that a party cannot be charged with liability merely on the ground that he has benefited by a contract entered into by another.

16. We must, in these circumstances, bold that the decree against defendants Nos. 1, 5 and 6 should be set aside.

17. If we were otherwise inclined [to give a decree to the plaintiff, we would have held that there is no substance in the argument that interest is not payable on the amount, although we would have been inclined to restrict the interest to 6 per cent. after the date of the suit. We have given anxious consideration to the case, having regard to the fact that the plaintiff's husband has advanced a large sum of money which undoubtedly has benefited the appellants. The case for the plaintiff bristles with difficulties of various kinds. We have been reluctantly forced to come to the conclusion that the plaintiff's claim is barred by limitation. Therefore, we reverse the decree of the Subordinate Judge and dismiss the suit with costs throughout.


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