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Kalyani Ammal Vs. Ezhumalai Nattar and anr. - Court Judgment

LegalCrystal Citation
SubjectProperty
CourtChennai High Court
Decided On
Reported in(1969)1MLJ76
AppellantKalyani Ammal
RespondentEzhumalai Nattar and anr.
Cases ReferredLock v. Furze
Excerpt:
- .....under the settlement deed. but it was held that the 3rd defendant could claim possession of the suit property only after the lifetime of thayanayaki, the plaintiff's vendor. the present plaintiff had then contended that certain improvement had been effected by her and this was evaluated at rs. 800. thayanayaki ammal died on 4th may, 1957 and thereupon the present third defendant as the remainderman filed the suit o.s. no. 158 of 1957 on the file of the court of the district munsif, chidambaram,, for possession of the suit property impleading the present plaintiff as the sole defendant in the suit. this suit ended in a decree by consent on 19th june, 1958. it was provided by the decree that the third defendant should before taking possession of the property personally, and charged on.....
Judgment:

M. Natesan, J.

1. The plaintiff, the decision in whose favour in the Court of first instance has been reversed on appeal raises an interesting question of law and I shall first set out the facts not in dispute. The suit is one for recovery of damages on breach of covenant of title and quiet enjoyment in relation to a purchase of certain immovable property by the plaintiff from one Thayanayaki Ammal. The property had originally belonged to a certain Kuppa Nattar, the maternal grandfather of the contesting respondent, the third defendant in the case. This Kuppa Nattar had two daughters, the said Thayanayaki Ammal and Chinnakolandai, mother of the third defendant. On 6th May, 1927, he settled the property of his aforesaid daughters for their life, the present third defendant to take the property absolutely after their lifetime. In 1930 Kuppa Nattar alleging dissatisfaction with his daughters' treatment of himself and his wife, purported to revoke the settlement deed but later conveyed the property in favour of his daughter Thayanayaki for a consideration of Rs. 400. Thayanayaki in her turn sold the property to the plaintiff under the registered sale deed dated 2nd March, 1947 for a consideration of Rs. 2,500. Exhibit A-1 is the registration copy of the deed. On Chinnakolandai's death the present third defendant instituted the suit O.S. No. 93 of 1951 on the file of the District Munsif's Court, Chidambaram, impugning the validity of the revocation deed and the subsequent transfers and claiming possession of the property. The present plaintiff was the first defendant in that suit. It was decided therein that the revocation was invalid and did not affect the third defendant's vested rights under the settlement deed. But it was held that the 3rd defendant could claim possession of the suit property only after the lifetime of Thayanayaki, the plaintiff's vendor. The present plaintiff had then contended that certain improvement had been effected by her and this was evaluated at Rs. 800. Thayanayaki Ammal died on 4th May, 1957 and thereupon the present third defendant as the remainderman filed the suit O.S. No. 158 of 1957 on the file of the Court of the District Munsif, Chidambaram,, for possession of the suit property impleading the present plaintiff as the sole defendant in the suit. This suit ended in a decree by consent on 19th June, 1958. It was provided by the decree that the third defendant should before taking possession of the property personally, and charged on the suit property pay the present plaintiff a sum of Rs. 1,350 inclusive of the sum of Rs. 800 found as the value of improvements in O.S. No. 93 of 1951. Till payment of this amount the plaintiff could enjoy the suit properties but should vacate and deliver vacant possession on receipt of the said sum of Rs. 1,350. There is no dispute that the 3rd defendant deposited the amount of Rs. 1,350 in Court as provided for in the compromise and that he took possession of the suit property from the plaintiff on 12th December, 1958. Within ten days of losing possession of the suit property on 22nd December, 1958, the plaintiff filed the suit out of which the present second appeal arises claiming damages for breach of covenant of title and quiet enjoyment against the defendants in the suit as heirs and legal representatives of Thayanayaki Ammal. Besides the third defendant two other persons were impleaded, defendants 1 and 2 as person in possession of the property of Thayanayaki Ammal. Several defences were raised against the claim, inter alia, res judicata, estoppel and limitation and there was also a counter-claim. The property was subject to a mortgage dated nth September, 1947 in favour of Thayanayaki Ammal herself for a sum of Rs. 1,000. The third defendant counter claimed for the amounts due under this mortgage with interest till 12th December, 1958, paying the necessary Court-fee. The trial Court dismissed the suit as regards defendants 1 and 2 as they were not heirs of Thayanayaki Ammal and were not in possession of any of her assets. The third defendant claimed himself to be heir to the deceased. At the trial, it came out that the third defendant had a sister Valambal who also would be an heir. She was subsequently impleaded as a respondent (4th defendant) in the appellate Court and she has remained ex parte. The trial Court assessed the market value of the property which the plaintiff purchased and lost at Rs. 4,000 on the date the plaintiff lost possession. As the plaintiff had received a sum of Rs. 1,350 as and for the value of improvements to the property, the trial Court passed a decree for damages in favour of the plaintiff for a sum of Rs. 2,650 against the estate of Thayanayaki Ammal in the hands of the third defendant. The trial Court rejected the counter-claim holding that no counter-claim was tenable on the facts of the case pointing out that the personal remedy on the mortgage had become barred. On appeal by the third defendant, the learned Subordinate Judge has construed the earlier compromise decree in O.S. No. 158 of 1957 between the plaintiff and the third defendant, Exhibit A-2, as in full settlement of all claims of the plaintiff. In the circumstances, while finding against the pleas of res judicata estoppel by judgment and limitation reasserted by the third defendant, plaintiff was held estopped by conduct from claiming any damages, the plaintiff having taken Rs. 1,350 under the settlement in O.S. No. 158 of 1957.

2. On the contentions of Counsel before me, three questions arise for consideration in the appeal (1) the question whether the earlier settlement in O.S. No. 158 of 1957 precluded the plaintiff from agitating her claim in damages for breach of covenant of title and quiet enjoyment, (2) the contention that as the plaintiff lost her right to possession only by the death of her covenantor, the covenant of quite enjoyment also came to an end; and (3) the question as to the quantum of damages which the plaintiff is entitled to, the property having been subject to an encumbrance at the time of the dispossession in favour of the covenantor herself. I may at once state that there is no substance in the first contention. The suit O.S. No. 1580 of 1957 was a suit by the present third defendant as the remainderman and not as representing the estate of the deceased. True, it is recited in the memorandum of compromise that over and above the sum of Rs. 800 provided for as the value of the improvements in O.S. No. 93 of 1951, the plaintiff therein, the present third defendant, was to pay the present plaintiff, the defendant therein, a further sum of Rs. 330 in respect of the claim over the suit property then put forward by her. The lower appellate Court has placed considerable reliance for its construction of the compromise on a term-therein that excepting the right to the sum of Rs. 1,350 the present plaintiff shall not have any other over the suit property. There is absolutely nothing in the compromise even impliedly suggesting that the claim for damages for breach of covenants under the sale deed was also subject of the settlement. Certainly the claim for damages for breach of covenant and quiet enjoyment is not a claim over the property the subject of that suit.

3. On the death of the vendor, her title over the property had become extinguished and equally all rights and interests of the vendee over the property. The term in question, in the compromise is only a specific re-affirmation of this position, the only possible claim relating to improvements having been settled. In fact, it is this term negativing all interests and rights over the property that gives the present plaintiff her cause of action to their damages. It is a coincidence that the remainderman is also a legal representative of the life tenant who had attempted to convey absolute interest in the property. The present suit is laid against the third defendant not as a remainderman who has taken possession of the suit property but as heir of Thayanayaki Ammal who has inherited her other properties. The learned. Subordinate Judge himself remarks that the plaintiff had not specifically given up her rights to claim damages in respect of her eventual dispossession. It must be noted that the cause of action for the present suit is the dispossession and the dispossession was on 12th December, 1958. Now if notwithstanding the compromise decree, the third defendant had not deposited the sum of Rs. 1,350 and not taken possession, the present plaintiff would have had no cause of action on the basis of the covenant of quiet enjoyment. It is the loss of the properties and all rights therein that has given her the cause of action to maintain the suit against the heir of her vendor. No doubt it would have been open to the third defendant in his suit for possession to have settled this claim also, in the particular circumstances, as he happened to be an heir of the deceased. But that has not been the subject of the compromise. Admittedly, the claim for damages was not mooted in those proceedings. Nor any case of representation to base an estoppel thereon has been made out. There is no evidence of any representation by the present plaintiff that on payment of Rs. 1,350 she would make no claim against the estate of Thayanayaki Ammal for damages.

4. Now to take up the second point, the conveyance in question by the deceased in favour of the plaintiff contains the usual covenant of title and quiet enjoyment. It is recited in the sale deed that the property conveyed is the sale acquisition of the vendor and that the consideration of Rs. 2,500 settled having received, the vendee and her heirs may thenceforth hold and enjoy the property with absolute rights as under an out and out sale with rights of alienation by gift, sale or otherwise. The vendor gives an assurance against encumbrance and a covenant holding herself responsible for losses that may be suffered by reason of any encumbrance over the property. It has turned out since, that she had no authority to grant a conveyance which could enure beyond her life. By the conveyance she has guaranteed quiet enjoyment to the vendee and her heirs from generation to generation giving absolute rights purporting to convey as full owner. Certainly she cannot escape from responsibility for the obligation she has guaranteed when it is ultimately found that her title was not as extensive as she purported it to be. She may be dead but her estate could be made to answer for the breach. The covenant for quiet enjoyment in its nature can survive the covenantor, it is not a simple personal covenant of' the vendor to come to an end with life with which the purported transfer came to an end. The covenant neither expressly nor impliedly is limited in its duration to the lifetime of the vendor and as observed in Gulabchand v. Surayi Rao : AIR1950Bom401 , 406, ' it would indeed be a startling result of the incident of the covenant if it was to be extinguished precisely at the moment when the necessity for the protection afforded by it arises '.

5. The vendor in that case who prior to the impugned alienation had been a ward under the Bombay Court of Ward Act, was not competent to dispose of property beyond his lifetime without the previous sanction of the Collector. By the sale deed in question there, he purported to convey absolute interest in two houses to the vendees. After the death of the vendor his son filed a suit and recovered possession of the houses on the ground that the sale was void beyond the lifetime of the vendor. The suit out of which the appeal in question came up before their Lordships of the Bombay High Court was filed against the son of the vendor as the legal representative of the vendor claiming damages for breach of the covenant of title and quiet enjoyment. The plaintiff relied upon the covenant for title and quiet enjoyment arising by obligation of law under Section 55, Clause (2) of the Transfer of Property Act as well as by the express words in the sale deed, as in the instant case. It is in the context of this claim that Shah, J., who delivered the judgment of the Bench made the observation above referred to. This case comes close enough to the instant case on hand.

6. Illustrative of the liability on the covenant in such circumstances, reference may be made to Williams v. Burrel (1845) 1 Com. Bench Rep. H. 8 Vict. 402 at 433. There one George, devisee for life with leasing power, by an indenture of lease granted a demise to one Williams for 99 years if three persons therein named should so long live, the indenture assuring the demised premises for the term to the lessee, his executors, administrators and assigns. This lease having upon the death of the George been held to be void as against the remainderman by the judgment of the Court of law, on the ground that it was not made in due conformity with the leasing power, it was held that the clause in question operated as an express covenant for quiet enjoyment during the whole term granted by the lease and consequently the Williams or his assigns or executors etc. right to recover against the executors or George the value of the term, the costs of defending the action of ejectment brought by the remainderman, and also the sum recovered by him for mesne profits. Tindal, C.J., stated:.both upon principle and authority, we think this is an express covenant for quiet enjoyment, which extend to the terms purported to be granted and consequently that the defendants are liable thereon are executors of the covenantor.

7. I may also refer to Lock v. Furze (1865) 1 L.R.441. The facts as set out in the headnote are, A was in a possession of premises under a lease from B, which would expire on the 4th December, 1864. In February, 1860, A in consideration of a premium of 400 obtained from B, a further lease of the same premises for 21 years and 21 days, to commence from the expiration of the former lease. On the death of B in 1863, it was found that B was only tenant for life, with power to grant leases in possession and not in reversion, and consequently that the lease so granted by him to A in February 1860 was void. A thereupon obtained from the reversioners a fresh lease for seven years at a considerable increase of rent and sued C (B's executor) upon the covenant for quiet enjoyment obtained in the void lease. The plaintiff who got judgment was held entitled to recover besides the 400 premium which he had paid to B, the costs of preparing the void lease, and the value of what he had lost by B's breach of contract, substantially the difference between the value of the term professed to be granted to him by the lease of November, 1850 and that of his 7 years term which he obtained from the reversioner. In the course of his judgment Channell, C.J., observed:

The testator expressly bargained for that which he could not perform; and therefore I think the proper principle upon which the damages should be assessed is, a full compensation to the plaintiff for that which he has lost, not limited to the amount actually paid by him.

8. Looking at the matter from another angle in the present case the estate of the deceased has had the benefit of the bargain by which the deceased had assured quiet enjoyment absolutely and forever to the vendee, and received consideration on such assurance. If by her death the position should be lost, I do not see why her estate which had gained under the covenant should not be made to compensate in damages for breach of the covenants. The representatives of the estate will be bound by the covenant of the deceased. There is nothing in the nature : or character of the covenant that would terminate it with the death of the covenantor vis-a-vis the covenantor's representatives and the covenantee.

9. To take up the third question, damages, it is well settled that if the purchaser is compelled to give up possession by reason of the extinction of the settlor's title, the normal measure of damages follows the general principles of law, the purchaser is evicted the measure of damages is the market value of the land at the time of eviction as pointed in Mayne and Mecgregor on Damages, 12th Edition, page 463:

The market value of the land is to be taken at the time neither of contract nor of conveyance but of eviction, and that therefore any increase in its value, whether due to ordinary market changes or to improvements made on the land by the purchaser will fall within the assessment figure.

In Williams on Vendor and Purchaser, 4th Edition, Volume II, the principle is thus stated at page 1089:

The measure of damages for breach of covenant for quiet enjoyment (which, as we have seen is not broken until some actual disturbance has taken place) is what the covenantee has lost in consequence of the breach of the covenant; that is to say, in case of an entire eviction, the value at the date of the breach of the property so taken away from him.

At page 1090 it is stated:

The actual value of the land as it existed at the date of the breach of covenant would include the value of any building or similar improvements which the purchaser has erected or made.

10. In the present case both the Courts below have concurrently assessed the market value of the property at Rs. 4,000. The plaintiff had already received a sum of Rs. 1,350 as the value of the improvements she had given up and normally she would be entitled to the balance, namely, a sum of Rs. 2,650 as damages. But the property on the date of dispossession was subject to an encumbrance in favour of the vendor herself. The 3rd defendant had put in a counter claim for Rs. 1,843-75 made up of the principal and interest due on the mortgage less a sum of Rs. 100 stated to have been paid for the mortgage. The personal remedy on the mortgage had become barred long ago but the mortgage was subsisting. The trial Court while granting the decree for damages rejected the counterclaim in its entirety as not maintainable either independently or as a set off, legal or equitable. The appellate Court while of the view that there could be a set off, has not gone into the claim as it was dismissing the suit. The learned Subordinate Judge felt that, if necessary, the counter claim would have to be remanded for fresh disposal. I do not think that any remand is necessary in this case. The plaintiff is entitled only for the value of the property on the date of the dispossession and it is manifest that the monetary loss which the plain-tiff has sustained is the value of the equity of redemption. The mortgage was subsisting at the time of the dispossession. It must be borne in mind that if the mortgagor was personally liable, if the property had been sold free of encumbrances on the date of dispossession, the mortgagor could have got only the market price less the amount due on the mortgage. To the extent there was a subsisting encumbrance on the property, the value of the property stood diminished. The plaintiff could get only the diminished value. In the circumstances, it is unnecessary to examine the question whether there can be a set-off legal or equitable or the counter claim is tenable. The plaintiff who is entitled only to the value of the property can get only its real value namely the diminished value of the property by reason of the subsisting encumbrance and not the value of the property free of encumbrances.

11. In this view before the case could be finally disposed of, it is necessary to ascertain the amount actually due on the mortgage as on 12th December, 1958, the date of dispossession. A finding in that regard is therefore necessary and the learned Subordinate Judge, Cuddalore, will submit a finding, on the question whether any amount and if so what amount was due and outstanding on the mortgage dated 11 th September, 1947 executed by the plaintiff in favour of the deceased Thayanayaki Ammal on 12th December, 1958. The parties may be permitted to adduce evidence on the question. Time for submission of findings eight weeks from the receipt of records. Objections, if any, ten days.

(On receipt of the findings, the Court delivered the following Judgment).

12. The learned Subordinate Judge has submitted, his finding that a sum of Rs. 1,743-75 was due on the mortgage of the property as on 12th December, 1958,, the date of plaintiff's dispossession. It follows that the loss that the plaintiff has suffered by the dispossession is the value of the property less the amount due on the mortgage. Giving credit for the other amounts already paid and deducting the value of the encumbrance, the plaintiff will be entitled to, as damages, the sum of Rs. 906-25.

13. There will be a decree for the said amount from the estate of the deceased Thayanayaki Ammal in the hands of the third defendant with interest thereon at 51/2 per cent. per annum, from the date of the plaint till date of realisation. Having regard to the circumstances of the case, the plaintiff will be entitled to proportionate costs on the amount decreed, in all the three Courts. The second appeal is allowed accordingly. No leave.


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